Hana Bank Requests FSC to Extend Deadline Again for Accepting KIKO Dispute Mediation Proposal

On the 3rd, officials were working on promotional wrapping related to the 'Hana Bank' brand name, which removed 'KEB', outside the Hana Bank headquarters in Jung-gu, Seoul. Hana Bank announced that from this day forward, the brand name will change from KEB Hana Bank to 'Hana Bank', marking a fresh start as the new Hana Bank preparing for the next 10 years. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kim Min-young] Hana Bank's board of directors has decided to request the Financial Supervisory Service (FSS) to extend the deadline for notifying whether it will accept the dispute mediation proposal regarding the foreign exchange derivative product KIKO.

According to the financial sector on the 3rd, Hana Bank held a board meeting on the day to discuss whether to accept the KIKO dispute mediation results but could not reach a conclusion. The agenda will be reconsidered at a future board meeting, with the date yet to be determined.

The bank's board also decided to request the FSS to extend the deadline for notifying acceptance of compensation.

The FSS Dispute Mediation Committee ruled on December 13 last year that four companies affected by KIKO should be compensated between 15% and 41% of their losses.

The compensation amounts by bank are: Shinhan Bank 15 billion KRW, Woori Bank 4.2 billion KRW, Korea Development Bank 2.8 billion KRW, Hana Bank 1.8 billion KRW, Daegu Bank 1.1 billion KRW, and Citibank 600 million KRW.

Previously, the banking sector failed to reach a conclusion by the first notification deadline of the 7th of last month and was granted a one-time extension until the 7th of this month.

On the 8th of last month, Hana Bank stated that regardless of acceptance, it would participate in a future bank consultative body for voluntary adjustment, leading to expectations that it would accept the mediation committee's decision.

Earlier, Woori Bank recently decided at its board meeting to accept the mediation committee's KIKO dispute resolution and compensate two affected companies with 4.2 billion KRW. Woori Bank is the first to decide on KIKO compensation.

KIKO is a derivative financial product structured so that if the exchange rate fluctuates within a certain range, foreign currency can be sold at an agreed rate, but if it goes beyond that range, significant losses occur. Export-oriented small and medium-sized enterprises subscribed for exchange rate hedging purposes but suffered damages of about 3.3 trillion KRW across 732 companies when the won-dollar exchange rate surged due to the 2008 global financial crisis.

This content was produced with the assistance of AI translation services.