ID :
212121
Tue, 10/11/2011 - 07:34
Auther :
Shortlink :
https://oananews.org//node/212121
The shortlink copeid
S. Korean financial firms set to pay hefty bonuses
SEOUL (Yonhap) - South Korean financial companies are expected to dole out massive amounts of bonuses to their employees on the back of their robust profits, market watchers said Tuesday, raising concerns the move may spark similar anger here that is fueling protests on Wall Street.
Local banks and brokerages racked up massive profits earlier this year, thanks to increased commission and interest incomes. The combined net profit of 18 lenders reached 10 trillion won (US$9 billion) in the first six months, while 62 securities firms raked in a net 7.1 trillion won in the April-June period.
Market watchers said if the trend continues, banks are projected to see their combined annual earnings reach a record 20 trillion won. Brokerages' profits may slide amid ongoing financial turmoil, but their earnings for fiscal 2011 is likely to surpass last year's results, they said.
The hefty profits are expected to lead to increased bonus payments for finance industry workers.
Banks, which set bonuses on the back of annual performances, are forecast to pay as much as 150 percent in bonuses to all employees, according to market watchers.
"Bonuses are expected to be larger compared with last year, thanks to better-than-expected profits. The rise in benchmark interest rate this year has helped improve banks' profitability," a bank official said.
South Korea hiked its seven-day repo rate three times this year by quarter percentage points each time. Coupled with the government's efforts to cap rising household debt, the move has benefited banks by widening the gap between their lending rates and deposit rates.
Meanwhile, salespeople at some major brokerages are expected to earn as much as 2 billion won via bonuses.
"Bonuses for sales forces vary according to their performances. While some will undergo pay cuts next year, some will receive more than 2 billion won," said an industry official asking to be unnamed.
Local banks and brokerages racked up massive profits earlier this year, thanks to increased commission and interest incomes. The combined net profit of 18 lenders reached 10 trillion won (US$9 billion) in the first six months, while 62 securities firms raked in a net 7.1 trillion won in the April-June period.
Market watchers said if the trend continues, banks are projected to see their combined annual earnings reach a record 20 trillion won. Brokerages' profits may slide amid ongoing financial turmoil, but their earnings for fiscal 2011 is likely to surpass last year's results, they said.
The hefty profits are expected to lead to increased bonus payments for finance industry workers.
Banks, which set bonuses on the back of annual performances, are forecast to pay as much as 150 percent in bonuses to all employees, according to market watchers.
"Bonuses are expected to be larger compared with last year, thanks to better-than-expected profits. The rise in benchmark interest rate this year has helped improve banks' profitability," a bank official said.
South Korea hiked its seven-day repo rate three times this year by quarter percentage points each time. Coupled with the government's efforts to cap rising household debt, the move has benefited banks by widening the gap between their lending rates and deposit rates.
Meanwhile, salespeople at some major brokerages are expected to earn as much as 2 billion won via bonuses.
"Bonuses for sales forces vary according to their performances. While some will undergo pay cuts next year, some will receive more than 2 billion won," said an industry official asking to be unnamed.
