ID :
185432
Tue, 05/31/2011 - 05:48
Auther :

Korean financial firms' overseas fee income hits 15-month high in April


SEOUL, May 31 (Yonhap) -- South Korean financial firms posted the largest commission income in 15 months in April by offering financial services to foreigners as foreign investors snapped up local stocks and bonds, the central bank said Tuesday.
South Korean financial firms earned US$289.4 million in commission income from non-residents in April, up from $243.2 million in March, according to the Bank of Korea (BOK). The April figure marked the largest amount since $296.8 million seen in January 2010.
This resulted in an improvement in the balance of financial services in April, leading the country to post a surplus of $227.4 million, the largest in 14 months.
The balance tracks the country's cross-border payment or earnings in fees through the use of financial services, including bond and stock investment.
"Local financial firms earned more fee income from overseas on the back of a rise in offshore investors' stock and bond investment, and an increase in derivatives trading to hedge risks," said an official at the BOK.
South Korean assets are viewed as attractive by foreign investors mainly because the country's economy is on a solid recovery track and an expected appreciation of the local currency offers a chance to lock in foreign exchange profits.
Meanwhile, a shortfall of South Korean companies' payments and earnings over the use of patent and intellectual property declined to the lowest level in two years in April, the central bank said.
The deficit of the country's royalty and intellectual property balance reached $119.9 million in April, down from a shortfall of $597 million in March, according to the BOK.
The April reading marked the lowest level since a deficit of $109.9 million registered in April 2009, the bank added.
A decrease in the April shortfall came mainly because South Korean companies' overseas payments of royalties and license fees sharply fell, it added.
South Korea's overseas payments of royalties and license fees came in at $464.8 million last month, down 39.5 percent from the previous month, the BOK added.
The balance tracks the nation's cross-border expenses and income for using patent and copy rights as well as brand royalties.
"It is positive that a shortfall of the balance declined, given that South Korea has seen a chronic deficit of the service account. But it is too early to say that this trend will continue," he said.
South Korea has been undergoing a chronic shortage of the service account mainly because Koreans heavily spend money on overseas travel and learning.
The country's service account narrowed to $178.7 million last month, compared with a deficit of $328 million in March. It marked the narrowest deficit since a surplus of $147.4 million in May 2010.

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