(Photo = Yonhap news)

[Alpha Biz=(Chicago) Reporter Paul Lee] According to the Hong Kong H Index Equity Linked Securities (ELS) dispute settlement criteria, the banking sector is required to compensate investors at least 1 trillion won in the first half of this year alone.

According to the Financial Supervisory Service (FSS) on the 12th, the Hong Kong H index ELS sales balance stood at 18.8 trillion won as of the end of last year. Until last month, KRW 1.2 trillion out of KRW 2.2 trillion in maturity was lost. Among them, the size of the Hong Kong H index ELS sold at banks is 15.4 trillion won. The bank's Hong Kong H index ELS, which expired between January and February this year, amounted to 1.9 trillion won, with losses of 1 trillion won during the period. As the maturity in the first half of this year reaches KRW 8.7 trillion, losses are expected to exceed KRW 4 trillion.

The bank's compensation for the first half of the year is expected to exceed 1.2 trillion won. As a result of the on-site inspection, the FSS found that all banks violated one or more of the suitability principles and explanation obligations. This is why they asked investors to compensate at least 20% or more. If it was sold offline, the compensation ratio will be added by 10 percentage points. The bank sold more than 90% of its ELS products at the window. In the end, a basic compensation ratio of 30% applies to most bank sales. Kookmin Bank's compensation for the first half of the year, which expires at KRW 4.7726 trillion, is expected to reach around KRW 700 billion.

 

[ⓒ AlphaBIZ. 무단전재-재배포 금지]