Financial Microscope

The three major regional financial holding companies—BNK, JB, and iM Financial—recorded a combined net profit of approximately 500 billion won in the first quarter, up about 10% year-on-year, thereby expanding shareholder returns. However, their main subsidiaries, the banks, saw a sharp rise in non-performing loan (NPL, loans overdue by more than three months) ratios, leading to worsening asset quality indicators that have emerged as a pressing issue to address. While these regional financial holding companies plan to focus on risk mitigation in the second quarter through active disposal and sale of distressed assets, there are concerns that prolonged geopolitical risks from the Middle East and continued sluggish regional economies may entrench asset quality problems. Regional Financial Groups Defend Q1 Performance Thanks to Non-Bank Units According to the financial sector on May 6, the combined net profit of the three regional financial groups—BNK, JB, and iM Financial—for the first q

In the aftermath of the war involving Iran, the marine insurance market has effectively ceased to function, leading to soaring insurance premiums and a contraction in the reinsurance sector, further spreading risk. In contrast, in Europe, the expansion of defense spending and rising interest rates are converging to create new opportunities for insurance companies in terms of asset management. According to the financial sector on March 25, the blockade of the Strait of Hormuz has persisted following airstrikes by the United States and Israel against Iran, resulting in ongoing stagnation in the marine insurance market. With the United Kingdom Maritime Trade Operations (UKMTO) reporting a series of merchant vessel attacks and hundreds of ships stranded near the strait, some private insurers are halting new underwriting, seeking to reduce their risk exposure. Under these circumstances, war risk insurance premiums—designed to cover special risks such as war and terrorism—have surged in a s

Recently, demand deposits at major banks have been declining, while the outstanding balance of overdraft accounts (credit line loans) has been increasing. This paradoxical phenomenon is being interpreted as a result of individual investors increasing their stock market investments, even as the KOSPI is at risk of falling below the 5,000 mark and the KOSDAQ below the 1,000 mark due to the Iran crisis. Banks are also making all-out efforts to attract deposits, raising time deposit interest rates and launching high-interest special products. 'Withdrawing from Accounts, Opening Overdrafts'...Money Moves Accelerate Amid Stock Market Volatility According to the financial sector on March 11, the demand deposits of the five major commercial banks (KB Kookmin, Shinhan, Woori, Hana, and NH Nonghyup) stood at 679.1552 trillion won as of March 6. This is a decrease of 5.7052 trillion won compared to the end of last month (684.8604 trillion won). The prevailing interpretation is that funds set asid

The fifth-generation indemnity health insurance is set to launch this April, or at the latest, within the first half of the year. The key features are lowering policyholders' premium burdens and differentiating out-of-pocket costs and coverage by classifying treatments as severe or non-severe. The success of the fifth-generation indemnity product will depend on the structure of contract buybacks and optional riders, which the financial authorities are currently preparing to introduce. Fifth-Generation Indemnity Insurance Likely to Launch in April... Differentiated Coverage for Severe and Non-Severe TreatmentsAccording to the financial sector on January 14, financial authorities and insurance companies are finalizing the details of the fifth-generation indemnity insurance, aiming for an April launch. The basic framework of the fifth-generation product was already announced in April last year. However, disagreements between the authorities and insurers over compensation methods to encou

"The National Pension Service is sacrificing profitability to defend the exchange rate." This is a recent criticism from some quarters regarding the National Pension Service's (NPS) currency hedging. In response, the foreign exchange authorities countered that it is "not a sacrifice of the nation's retirement assets, but rather their protection." They argue that realizing gains when the exchange rate rises and securing profitability through hedging is, in the long term, the way to safeguard the nation's retirement assets. Currency hedging refers to locking in gains or losses from exchange rate fluctuations in advance. In periods like the present, when overseas stock prices and the exchange rate move in the same direction, hedging plays a role in reducing the volatility in gains and losses that could otherwise increase without such measures. The foreign exchange authorities particularly point out that for institutional investors like the National Pension Service, which have large overse

When someone asks, "Who hasn't paid the membership fee this month?", an artificial intelligence (AI) group treasurer now appears to easily organize a list of those who haven't paid. The "Group Account," which has become essential for group activities, is gradually evolving. In addition to KakaoBank, the pioneer of group accounts, commercial banks and secondary financial institutions have recently launched their own group account products. For banks, these accounts are a way to secure low-cost deposits, leading to fierce competition to attract group account customers. Evolving Group Accounts...AI Treasurer Function AddedKakaoBank recently introduced an AI group treasurer for its group account service. The AI group treasurer now performs key tasks that were previously handled by a human treasurer. With the addition of the AI treasurer function, the service goes beyond simple deposit and withdrawal checks to analyze expenditures by period and usage, as well as consumption patterns. Kakao

As major banks have significantly raised the threshold for household loans to manage their total lending volume, genuine borrowers are facing difficulties. With commercial banks effectively suspending new mortgage loans scheduled for this year, more people are turning to secondary financial institutions, which generally offer higher interest rates. Experts advise that since the situation is likely to improve starting next month, unless it is an emergency, borrowers should try to hold out for another month. Banks Tighten Mortgage Lending to Control Household LoansAccording to the banking sector on December 3, KB Kookmin Bank is restricting new applications for mortgage loans intended for home purchases and certain unsecured loans scheduled for execution this year. The bank has also suspended refinancing loans (mortgage, jeonse, and unsecured loans) from other banks to KB Kookmin Bank, as well as its non-face-to-face unsecured loan products, 'KB Star Credit Loan I and II.' While mortgage

Major banks are moving beyond simply launching new products and are now introducing generation-specific strategies. Their intention is to win over a diverse range of customers by offering services that combine products with entertainment throughout the entire lifecycle. According to the financial industry on November 26, the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) are launching products and services tailored to different stages of life. KB Kookmin Bank stands out for its meticulous strategies for each generation. In the first half of next year, it will launch the "KB Youth Service" targeting customers in their 20s. The main feature is that customers in their 20s can create a dedicated page within the KB Kookmin Bank application, KB Star Banking. On this dedicated page, financial benefits such as "KB Financial Coupons" will be provided, along with daily missions that customers can participate in. For customers who complete these missions, non-financial benef

Insurance companies have issued approximately 9 trillion won in capital securities this year, surpassing last year's all-time record. This surge is attributed to heightened efforts to manage financial soundness, prompted by interest rate cuts and accounting-related regulations. Experts advise that relying solely on capital securities for financial soundness has its limitations and recommend adopting strategies to diversify risks. Capital Securities Issuance Surpasses 9 Trillion Won... All-Time HighAccording to the Korea Securities Depository and the Financial Supervisory Service as of November 4, domestic insurance companies have issued 8.837 trillion won in capital securities (including subordinated foreign currency bonds) so far this year. This not only marks the highest amount ever but also exceeds last year’s total issuance of 8.665 trillion won. Including Heungkuk Life Insurance’s planned issuance of 200 billion won in subordinated bonds later this month, the total capital securit

Person A purchased an ultra-high-end residence in Manhattan, New York, worth 10 million dollars (approximately 14 billion won), with the intention of moving assets overseas. Person A installed a personal wallet application on their mobile phone and created a personal wallet. Afterwards, Person A met an unregistered currency exchange broker in person and received 10 million dollars worth of the stablecoin Tether (USDT) into their personal (non-custodial) wallet, handing over slush funds (Korean won in cash) accumulated over several years. To evade tracking by authorities, Person A transferred the USDT to an exchange in an emerging market with weak Know Your Customer (KYC) procedures, and then withdrew it again to another personal wallet. Person A plans to keep the USDT in a personal wallet and, after immigrating to the United States in the future, launder 2 million dollars worth of USDT into legitimate dollars to use for purchasing a home and covering living expenses. Person B illegally