Surviving savings banks’ shares on roller coaster

Home > Business > Finance

print dictionary print

Surviving savings banks’ shares on roller coaster

Listed savings banks that survived the scrutiny of financial regulators have seen their stock values seesaw, as investors’ relief at some banks avoiding suspensions led to a general mistrust of the sector’s financial soundness.

Meanwhile, minority shareholders in suspended savings banks are expected to see nearly 13 billion won ($11.4 million) in stocks become worthless upon possible delisting, sparking protests and moves to form class action suits by investors.

Since Sunday’s suspensions closed down four savings banks, 93 banks remain in operation.

Among them, stock prices of listed savings banks such as Jinheung, Seoul, Pureun and Shinmin savings banks have been on a roller coaster since news of possible suspensions spread last week.

Jinheung Savings Bank - now the sector’s fourth largest - fell by the daily trading limit of 15 percent last Friday before jumping back up by 15 percent on Monday, as Jinheung was spared in Sunday’s suspensions.

However, Jinheung confirmed news on Tuesday that it was selling its subsidiary Gyeonggi Savings Bank “to improve financial soundness,” causing it to tumble for two straight sessions to close at 1,625 won yesterday - a 30 percent drop from last Wednesday.

Shinmin Savings Bank rose for two straight sessions on Monday and Tuesday by roughly 15 percent and 9 percent respectively, as it was viewed as comparatively sound. Shinmin was removed from a stock “watchlist” managed by the Korea Exchange in Feb. as the bank’s balance sheets improved.

However, Shinmin plummeted by a whopping 14.6 percent yesterday to close at 1,725 won.

Analysts said the retreat from surviving savings banks underscores a lack of confidence in the sector.

“Just because large savings banks close their doors doesn’t mean that the money will subsequently flock to surviving banks,” said Yoo Sang-ho, an analyst at HI Investment & Securities.

Meanwhile, minority shareholders of suspended Solomon and Korea savings banks are up in arms.

According to the Financial Supervisory Service, Solomon had 5,467 minority shareholders as of last June with shares worth 9.85 billion won as of Friday; Korea Savings Bank had 1,947 minority shareholders as of December with 2.98 billion won in stocks as of Friday. Their trading has been suspended until a delisting review is held.

By Lee Jung-yoon [joyce@Joongang.co.kr]

More in Finance

Kospi sets another all-time high as optimism continues

Kim Kwang-soo named as sole candidate to head banking federation

Kospi hits record 2,602.59 as optimism continues after U.S. election result

Dollar deposits jump as punters bet on currency's rebound

Reservation app operator Yanolja to go public next year

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now