 |
| Financial Supervisory Service Governor Lee Bok-hyun applauds at a seminar in Seoul, Feb. 17. Yonhap |
By Lee Min-hyung
Financial stocks are rapidly losing luster here, as foreign investors dump large-cap bank shares en masse amid heightened regulatory uncertainties.
Major bank shares _ including KB, Shinhan, Hana and Woori _ extended gains until mid-January on their rosy earnings outlooks and the bullish KOSPI. But the momentum slowed over the past month as the government and financial authorities stepped up their regulatory and critical rhetoric against lenders.
According to data from the Korea Exchange, foreign investors dumped 253.28 billion won ($195.59 million) worth of shares in the four financial holding firms and KakaoBank for three trading days from Feb. 14. The unexpected selling spree sapped overall investor confidence, resulting in a sharp decline in their stock prices.
Shares of KB Financial Group, the largest financial holding firm here by market capitalization, reached this year's high of 60,700 won per share on Jan. 17, but tumbled to below the 50,000-won mark last week following repeated warnings by watchdogs. Shares of Shinhan and other banking groups also started spiraling downwards during the same period due to similar reasons.
This came in reaction to President Yoon Suk Yeol's latest remark denouncing banks for "throwing a party" with their excessive interest profit generated by steep rate hikes last year. He urged relevant financial authorities to take measures against banks' oligopoly at a critical time when most households suffer from mounting financial burdens.
According to data from the nation's top five banking groups, the lenders generated a combined interest profit of 49.23 trillion won in 2022, up 18.5 percent from the previous year. After offering massive voluntary retirement allowances this year, the banks are also forecast to increase incentives for their employees on the drastic earnings growth.
"The banking industry's oligopolistic structure creates harmful effects (across the society)," Yoon said last week. "Authorities should come up with practical measures to toughen competition among them."
In response, Financial Supervisory Service (FSS) Governor Lee Bok-hyun also pledged to look deeper into whether banks are fulfilling their role for the public.
"Banks are increasing their returns on equity by cutting costs through shutdowns of branch offices and reduced job creation," Lee said. "They made tens of trillions of won in revenue, even if each lender's financial products and their interest rates show little difference from the perspective of customers."
But market analysts left open the possibility of foreigner investors buying local financial stocks again.
"Major bank stocks recently entered a phase of adjustment on the regulatory concern and the FSS' recent decision to inspect banks' governance structures," Hana Securities analyst Choi Chung-uk said. "But their move to expand shareholder returns may attract foreign investors from a mid- to long-term viewpoint."
![[INTERVIEW] 'One Day Off' star Lee Na-young, director on creating subtle, feel-good series](https://img.koreatimes.co.kr/upload/thumbnailV2/796618f56a44402eabe81fe4530ab988.jpg/dims/resize/178/optimize)
![[INTERVIEW] Lee Jun-hyuk unrecognizable in 'The Roundup: No Way Out'](https://img.koreatimes.co.kr/upload/thumbnailV2/77a9da6df7da4284adbee249a87307c1.jpg/dims/resize/178/optimize)
