Risky road ahead for South Korean banks
Weakening ROAs, risky NPLs, and funding exposures may prove to be stumbling blocks in the banks’ quest to seek compliance with Basel III. December 04, 2012 | Baron LaudermilkThe South Korean banking industry seems to have emerged from the recent global financial crisis relatively unscathed. Despite this, a more robust risk management infrastructure is being implemented in banks across the country, as South Korean banks are still facing challenges in maintaining healthy return on assets (ROA) figures and controlling its exposure to international funds and debt. However, the banks are still expecting to be Basel III-compliant on time. The beginning of 2012 was a challenging time for South Korean banks in terms of risk management. In April 2012, NPLs began to increase in cyclical industries, led by real estate project financing (with a NPL ratio of 6.76%) and shipbuilding (with a NPL ratio of 4.42%)) due to a negative macroeconomic outlook. Woori Financial Group successfully cut its NPL ratio from 3.24% in 2012 to 1.97% in 2011 by reducing loans to risky small businesses, but this number is still high compared to other banks in the region. Shinhan Financ... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Basel III, Credit Risk, Operational Risk & Security, Risk and Regulation, South Korea, Technology & Operationsbasel III,Credit Risk,OperationalRiskSecurity,Risk and Regulation,south korea,technology, Basel III,Credit Risk,Operational Risk & Security,Risk and Regulation,South Korea,Technology & Operations, Keywords:Basel III, Shinhan Financial Group, Woori Financial Group, Hana Financial Group, Misys, HP, SAS, KB Financial Group, IBK, KEB Basel III, Shinhan Financial Group, Woori Financial Group, Hana Financial Group, Misys, HP, SAS, KB Financial Group, IBK, KEB
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