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KB Kookmin stands out after DLF fiasco The bank's sales of private funds increased in the third quarter

Translated by Kim So-in 공개 2019-11-13 08:00:00

이 기사는 2019년 11월 13일 08:00 더벨 유료페이지에 표출된 기사입니다.

South Korean KB Kookmin Bank's sales of funds increased in the third quarter. The lender has re-taken the number one position as the largest fund seller in the country.

According to Korea Financial Investment Association (KOFIA)'s regulatory filing on November 8, South Korea's four major commercial banks - KB Kookmin, Shinhan, KEB Hana, Woori - sold a total of 75.6 trillion won worth funds as of the end of September, a 0.26 percent decrease compared to the second quarter. The four major banks' fund sales have grown every quarter from last year to the second quarter this year, before the trend has slowed down in the third quarter.

The banks' sales of privately placed funds have decreased in the wake of so-called derivative-linked funds (DLFs) case in the third quarter. The four leading banks' sales of publicly traded funds increased 1.73 percent to 54.78 trillion won compared to the previous quarter, while that of private funds decreased 5.14 percent. It seems because an increasing number of people turned to safer investments amid the fallout from the derivative-linked funds (DLFs) that incurred major losses for investors.

All four lenders' sales of publicly traded funds have increased over the first nine months of this year. KB Kookmin's funds collected 155.5 billion won, while that of Shinhan, KEB Hana, and Woori has increased 197.2 billion won, 385.3 billion won, and 194.3 billion won, respectively.

However, in terms of private funds, only KB Kookmin attracted inflows during the third quarter. As of end of September, KB Kookmin's private funds took in 805.2 billion won to 6.35 trillion won. Shinhan and KEB Hana's private funds saw outflows of 234.4 billion won and 440.9 billion won to 4.71 trillion won and 3.56 trillion won, respectively. Woori's private funds had outflows of 1.26 trillion won to 6.21 trillion won in the third quarter.

Industry watchers see KB Kookmin has benefited from the DLF fiasco. The lender initially reviewed the sale of DLF products, but its wealth management products committee has decided not to sell those products as the risk is too big compared to returns.

DLF products sold by Woori are tied to 10-year German Treasury bond yields. Investors get four percent in returns if the yields do not fall below -0.2 percent. However, if the yield falls below -0.2 percent, the investor faces losses 200 times the difference in interest rate.

KB Kookmin has reclaimed its number one position as the biggest fund seller in the third quarter. The lender hardened its position in domestic financial industry last year, but lost the lead to Woori in the first quarter of this year. As of the end of March, KB Kookmin's privately placed and publicly traded funds sales amounted to 19.18 trillion won while that of Woori recorded 19.53 trillion won.

"As Woori and KEB Hana have had trouble launching new products due to the DLF fiasco, private funds that reached maturity experienced outflows. As concerns on private funds spread across the market, money has flocked into safe haven. It seems that KB Kookmin could launch new products and sell funds smoothly as the lender has been relatively unaffected by the DLF fiasco," said one financial industry source.

(By reporter Lee Hyo-beom)

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