Some of the banks in South Korea are still struggling from bad real-estate loan losses. The country’s Financial Services Commission is considering the creation of a “bad bank” to take on all the non-performing assets currently held by lenders.
Of the roughly 100 small savings banks in South Korea, regulators have shut down eight weak banks so far this year. However collectively all these banks hold just 86.89 trillion South Korean won in assets which represents less than half of the assets of Hana Financial Group, one of the major lenders in the country.So the impact of the eight bank closures on the overall economy have been minimal.
The Five Major Banks of South Korea are:
- Hana Financial Group
- Woori Finance (WF)
- KB Financial Group (KB)
- Shinhan Financial Group (SHG)
- KDB Financial Group
Woori Finance’s ADR currently has a 1.82% yield and Shinhan has a 0.83% yield. KB does not pay a regular dividend.
Source: The Wall Street Journal
Related ETF:
iShares MSCI South Korea Index Fund(EWY)
Disclosure: No Positions
