Conglomerates’ Internal Reserves Significantly Increased Despite Taxation Policy

In the past six months, the internal reserves of the 10 major business groups increased by more than 29 trillion won (US$26 billion), and cashable assets by 5 trillion won (US$4.5 billion). This seems to be because they are having difficulties finding attractive investment destinations amid uncertain economic conditions.

According to market research firm CEO Score, their 83 listed and non-financial subsidiaries recorded combined internal reserves of 537.8 trillion won (US$488.8 billion) on a consolidated basis as of the end of the third quarter, while the amount had been 508.7 trillion won (US$462.1 billion) at the end of the first quarter. The reserve ratio went up from 1,679.1 percent to 1,733.6 percent, and the cashable assets increased from 148 trillion won (US$134 billion) to 153 trillion won (US$139 billion) during the same period.

The Samsung Group had 196.8 trillion won (US$178.9 billion) in internal reserves, 14.4 trillion won (US$13.1 billion) up from six months ago. Samsung Electronics’ internal reserves amounted to 168.6 trillion won (US$153.3 billion) to be equivalent to 86 percent of the group’s total.

It was followed by the Hyundai Motor Group (124.5 trillion won or US$113.2 billion, 7 percent up), SK Group (58.8 trillion won or US$53.4 billion, 6.9 percent up), LG Group (48 trillion won or US$43.6 billion, 5.5 percent up), POSCO Group (44.9 trillion won or US$40.8 billion, 1.1 percent up), Lotte Group (28.6 trillion won or US$25.9 billion, 3 percent up), Hyundai Heavy Industries Group (17.2 trillion won or US$15.6 billion, 11.6 percent down), GS Group (10.4 trillion won or US$9.4 billion, 5.8 percent up), Hanwha Group (6 trillion won or US$5.5 billion, 4.9 percent up) and Hanjin Group (2.7 trillion won or US$2.5 billion, 3.3 percent down). The decrements were 2.3 trillion won (US$2.1 billion) and 90 billion won (US$81.8 million) for Hyundai Heavy Industries and Hanjin.