Shinhan Investment Corp. Decides to Pay 50% of Investment to Customers Who Did Not Receive Principal on German DLS

Starting Next Month, a Total of 189.9 Billion KRW Payments Begin

[Asia Economy Reporter Minwoo Lee] Shinhan Financial Investment will provide an advance payment of half the investment amount to customers of the German real estate DLS (German Heritage DLS Trust). This is to prevent delays in principal repayment by prepaying 190 billion KRW to customers who have extended the maturity.

Shinhan Financial Investment announced this decision on the 22nd. The outstanding balance of the German real estate DLS sold by Shinhan Financial Investment is 379.9 billion KRW. As of this month, there are 921 cases of customers whose maturity has been extended, delaying principal repayment, with an investment amount of 215.9 billion KRW. They plan to provide 189.9 billion KRW in advance to give customers some relief. Among the seven companies selling the German real estate DLS, Shinhan Financial Investment is the only one to decide on an advance payment of 50% of the investment amount.

The advance payment targets include both individual and corporate customers. Customers will receive individual explanations regarding the related details and go through document procedures related to rights and obligations before receiving the payment next month. They also plan to make efforts to recover the remaining investment amount through various methods, and after deducting the advance payment from the recovered funds, they will proceed with settlement procedures to pay the balance to customers.

Meanwhile, Shinhan Financial Investment announced that it will also improve the entire process from selection, sales, to post-management of financial investment products. First, in the product selection process, the product function under the Wealth Management (WM) group will be separated to establish an independent Investment Product Service (IPS) headquarters, and the Investment Product Selection Committee, which includes consumer protection and internal control organizations, will be expanded and reorganized. This is intended to transparently manage the investment product selection process.

To improve the sales process, the weight of customer yield and customer satisfaction in the performance evaluation system has been increased. A new 'Product Audit Department' has also been established to independently perform post-sales management and investment product audit functions.

This is interpreted as a measure for reform following consecutive losses suffered by customers due to investment products such as the so-called 'Lime Fund' and German real estate DLS. Earlier, on the 20th, Shinhan Financial Investment CEO Byungchul Kim expressed apologies to customers at a board meeting held at the Yeouido headquarters in Seoul and announced his resignation from the CEO position.

A Shinhan Financial Investment official said, "Although this decision will bring financial burdens such as provisions and a decline in the Net Capital Ratio (NCR), we made this decision as responsible management to share the difficulties of our customers. We apologize to customers who are experiencing financial difficulties due to maturity extensions, and we will work even harder with asset managers to recover the investment funds in the future."

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