KB and Hana Bank Temporarily Suspend Sales of Hong Kong H-Index ELS

KB to suspend from the 30th, Hana Bank from the 4th of next month

KB Kookmin Bank and Hana Bank have also decided to temporarily stop selling equity-linked securities (ELS) products that include the Hong Kong H Index.

According to the banking sector on the 30th, Hana Bank will suspend sales of Hong Kong H Index-based equity-linked funds (ELF) and equity-linked trusts (ELT) products starting from the 4th of next month.

Hana Bank explained, "The Hong Kong H Index has continued an unexpected decline, forming a historic low, leading to mixed opinions that it is a good time to invest and that it could fall further due to uncertainties in the Chinese economy. As concerns over maturity losses on previously sold Hong Kong H Index-included ELT and ELF products are growing, we have decided to temporarily suspend sales of ELT and ELF products including the H Index." They added, "We will comprehensively consider financial market outlooks including China and trends of other financial institutions to assess the current situation and determine future sales directions."

For the same reason, KB Kookmin Bank also stopped selling ELS products linked to the Hong Kong H Index starting today.

Although ELS products can be sold by securities companies, banks have been selling ELS in the form of funds (ELF) and trusts (ELT) through private and public offerings. This decision was made as principal losses began to occur in ELS products linked to the Hong Kong H Index due to the recent sharp decline of the index.

Woori Bank and Shinhan Bank had already stopped selling ELS products linked to the Hong Kong H Index since last year, and NH Nonghyup Bank has also stopped selling principal non-guaranteed ELS since last month.

The Hong Kong H Index surpassed the 12,000 mark in February 2021 but fell below the 5,000 level in October of the same year. Currently, it is fluctuating around the 6,000 level.

Financial authorities have also launched a full-scale investigation targeting banks and securities firms that sold H Index-linked ELS. As of the 17th, the total amount of Hong Kong H Index-linked ELF and ELT maturing in the first half of next year sold by the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?was estimated at approximately 8.41 trillion KRW. By bank, the amounts were KB Kookmin Bank (4.7726 trillion KRW), NH Nonghyup Bank (1.4833 trillion KRW), Shinhan Bank (1.3766 trillion KRW), Hana Bank (752.6 billion KRW), and Woori Bank (24.9 billion KRW), respectively.

On the 14th, an employee is organizing US dollars and Japanese yen at the Hana Bank Counterfeit Response Center in Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@

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