April 26, 2024
Finance
Suhyup Bank to become mid-tier lender under new structure: CEO
[THE INVESTOR] Suhyup Bank will broaden its capital base to 2 trillion won ($1.7 billion) and become a mid-tier bank when it separates from the National Federation of Fisheries Cooperatives on Dec. 1, its CEO said on Nov. 22.
The semi-policy bank, which mainly provides financing and support for the fisheries and maritime industries, has been preparing to launch as a separate subsidiary of the NFFC to meet Basel III capitalization standards.
When the Financial Services Commission announced in 2013 that the regulator would apply new Basel III rules to the local banking sector from 2014, it gave Suhyup Bank a grace period of until Dec. 1, due to its unique member cooperative structure.
“To meet the Basel III standards, the bank will be split from the NFFC to be able to receive capital from NFFC, member cooperatives and employees. After the separation, the NFFC will own a 100 percent stake in Suhyup Bank,” Yi Won-tae, president and CEO of the bank, told reporters in Seoul.
“Our bank will become a mid-tier lender with a 2 trillion won capital base,” he said. The nation’s top lender Shinhan Bank’s capital base is 7.9 trillion won.
Under the reorganized structure, Suhyup Bank’s Tier 1 capital ratio and total capital ratio are expected to be 11.78 percent and 15.34 percent, respectively, as of the end of December this year, bank officials said.
The FSC recommends local lenders to maintain Tier 1 capital ratios of over 10 percent, and total capital ratios of over 13 percent.
After launching as a separate bank, Suhyup Bank will receive a combined 900 billion won of capital injection from the NFFC, which will issue fisheries and financial bonds, and investment by employees and member cooperatives, Yi said.
The bank aims to boost its net profit from 80 billion won with 28.4 trillion won in assets this year to 170 billion won with 34.9 trillion won in assets by 2021.
The Seoul-based bank received 1.15 trillion won of government support in 2001, when it was heavily indebted. It plans to make annual repayments of 70 billion won to 90 billion won from 2017 until 2028, the bank said.
By Kim Yoon-mi/The Korea Herald (yoonmi@heraldcorp.com)
The semi-policy bank, which mainly provides financing and support for the fisheries and maritime industries, has been preparing to launch as a separate subsidiary of the NFFC to meet Basel III capitalization standards.
When the Financial Services Commission announced in 2013 that the regulator would apply new Basel III rules to the local banking sector from 2014, it gave Suhyup Bank a grace period of until Dec. 1, due to its unique member cooperative structure.
“To meet the Basel III standards, the bank will be split from the NFFC to be able to receive capital from NFFC, member cooperatives and employees. After the separation, the NFFC will own a 100 percent stake in Suhyup Bank,” Yi Won-tae, president and CEO of the bank, told reporters in Seoul.
“Our bank will become a mid-tier lender with a 2 trillion won capital base,” he said. The nation’s top lender Shinhan Bank’s capital base is 7.9 trillion won.
Under the reorganized structure, Suhyup Bank’s Tier 1 capital ratio and total capital ratio are expected to be 11.78 percent and 15.34 percent, respectively, as of the end of December this year, bank officials said.
The FSC recommends local lenders to maintain Tier 1 capital ratios of over 10 percent, and total capital ratios of over 13 percent.
After launching as a separate bank, Suhyup Bank will receive a combined 900 billion won of capital injection from the NFFC, which will issue fisheries and financial bonds, and investment by employees and member cooperatives, Yi said.
The bank aims to boost its net profit from 80 billion won with 28.4 trillion won in assets this year to 170 billion won with 34.9 trillion won in assets by 2021.
The Seoul-based bank received 1.15 trillion won of government support in 2001, when it was heavily indebted. It plans to make annual repayments of 70 billion won to 90 billion won from 2017 until 2028, the bank said.
By Kim Yoon-mi/The Korea Herald (yoonmi@heraldcorp.com)
