Banks Retreat From Equities

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Banks Retreat From Equities


Korean commercial banks are reducing their stock portfolios this year after being burned by last year's investments.

Chohung Bank said that it stopped investing in stocks last October, while disposing of all its holdings of banking stocks except for stakes in its subsidiaries and borrowers under debt-restructuring programs.

Shinhan Bank set a ceiling on its exposure to stocks at 100 billion won ($78.4 million) early this year but currently has only 27.7 billion won in its portfolio, while Hana Bank invests only half of its 90-billion won limit in equities, according to the banks' officials.

Kookmin Bank slashed its equity-investment ceiling to 50 billion won this year from last year's 120 trillion won. Hanvit, Korea Exchange and KorAm banks have also decided to be as conservative as possible about stock investments.

The seven commercial lenders suffered a combined loss of 340 billion won from equity investment alone due to a slump in the local stock market, according to the banks.





by Kim Won-bae / Kim Hyun-chul

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