Savings banks' entertainment costs soar despite poor profit

SEOUL, June 13 (Yonhap) -- South Korean savings banks' entertainment expenses jumped in 2010 from five years earlier despite falling profits, data showed Monday, giving a new twist to the industry's snowballing lobbying scandal.
The combined entertainment expenses of the country's 23 largest savings bank reached 8.6 billion won (US$7.9 million) last year, up 71.5 percent from 5 billion in 2006, according to the data by Chaebul.com, a market research firm.
The data comes amid ongoing investigations into the country's savings bank sector, which recently has been marred by a scandal involving former senior regulatory officials and major shareholders of top player Busan Savings Bank Group.
Some employees at Busan Savings Bank were accused of tipping off their relatives and VIP customers about its impending business suspension in February so as to help them withdraw their deposits in advance. Regulatory officials are alleged of easing inspections on savings banks after receiving money or other favors.
According to the data, the 23 savings banks spent 20.8 percent more on entertainment costs in 2010 from a year earlier, when they were hit hard by bad debts.
South Korea's savings bank sector saw its operating loss worsen nearly five-fold to 290.2 billion won last year, as banks' asset quality tumbled on growing defaults on soured project finance loans.
The country's top financial regulator suspended operations of eight savings bank earlier this year.
mil@yna.co.kr