To Enhance Banks' Competitiveness
Financial Supervisory Service Governor Lee Bok-hyun met with foreign investors in Seoul on Feb. 22 and remarked that the agency is examining various ways to diversify South Korean banks’ business structures and enhance their competitiveness.
“Banks are quasi-public institutions and yet it has been pointed out that their effort for the public is not enough,” he said, adding, “This has to do with the fact that their industry is oligopolistic and competition has not been promoted.”
“At present, interest revenue accounts for more than 80 percent of their total profit and they are paying huge bonuses for employees, which means decreasing future growth potentials,” he went on to say, continuing, “Their current business models and practices are not suitable for overseas business beyond the saturated domestic market.”
When it comes to their shareholder return policies, he said the policies must be based on sufficient capital and loss absorption capabilities although the most important principle is that those are decisions to be made autonomously.