JPMorgan and Morgan Stanley executives, alongside dozens of overseas investors, will visit South Korea next month to meet with top policymakers and the heads of the country’s four largest financial groups, a rare Seoul trip designed to assess Korea risks firsthand.
The delegation, led by senior executives of the global investment banks, will come to Seoul in late September to hold separate meetings with the chairmen of the four financial groups, people familiar with the matter said on Tuesday.
The four chiefs are Yang Jong-hee of KB Financial Group; Jin Ok-dong of Shinhan Financial Group; Ham Young-joo of Hana Financial Group; and Yim Jong-yong of Woori Financial Group.
Lee Eog-weon (left), nominee for Financial Services Commission (FSC) head, and Lee Chan-jin, nominee for head of the Financial Supervisory Service (FSS) Sources said the investment bankers are also arranging sessions with chief executive officers and chief financial officers of leading life and non-life insurance companies, as well as the heads of Korea’s two financial regulators, the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS).
“This is not the typical early-year road show we’ve seen from global banks,” said a senior Korean financial executive. “With the government increasingly exerting its influence in the financial sector at a time when overseas investors are warming to Korean financial stocks under the K-Value-Up initiative, investors want to assess Korea risks firsthand.”
A STRING OF GOVERNMENT PROJECTS TO BE FINANCED BY LENDERS
In recent weeks, the Lee Jae Myung administration has rolled out a string of measures that some investors say could erode banks’ profitability and capital strength.
Shinhan Financial Group's headquarters in Seoul Those measures include the establishment of a state-led “bad bank” to absorb delinquent loans, funded in part by industry contributions.
Of the 800 billion won ($575 million) required for the bad bank, the government wants the financial sector to shoulder half, or 400 billion won. Financial institutions are working on how to split the bill amongst themselves.
The mooted 150 trillion won National Growth Fund will also be largely financed by the private sector, namely the domestic lenders.
In addition, the Finance Ministry recently announced a doubling of the education tax levied on financial companies, which is expected to increase the industry’s tax bill by 1.3 trillion won annually.
Hana Financial Group's headquarters Industry executives warn that further pressure could come from potential multitrillion-won fines tied to the alleged mis-selling of Hong Kong equity-linked securities (ELS) and possible collusion in setting mortgage loan-to-value (LTV) ratios perpetrated by some lenders.
SHARES FALL AS FOREIGN INVESTORS UNNERVED
The prospect of mounting levies and regulatory action has unnerved foreign shareholders, who hold large stakes in Korea’s financial groups.
KB Financial’s foreign ownership stands at 77.7%, followed by Hana Financial at 67.1% and Shinhan Financial at 60%.
Woori Financial Group's headquarters in Seoul Shares in all four major banking groups have dropped sharply over the past month, with KB Financial shedding more than 15% from its recent peak and sliding from the fifth-largest stock on Seoul's main bourse last month to the tenth largest as of Tuesday.
On Monday, shares of KB Financial closed down 5% at 107,500 won. Shinhan Financial finished down 2.2% at 67,600 won. Hana Financial closed 3.8% lower at 83,000 won. Woori Financial ended 2.6% lower at 24,800 won.
“What had been seen as a constructive value-up story is quickly turning into a governance and intervention risk,” said a Seoul-based analyst.
President Lee Jae Myung takes the presidential oath of office during a ceremony at the National Assembly in Seoul on June 4, 2025 Government officials said those measures are part of a shift toward “productive finance" designed to redirect resources from short-term shareholder payouts to broader economic growth.
Bank executives, however, said that sweeping obligations, including increased taxes, risk undermining capital ratios and shareholder returns.
For international investors who have shown renewed interest in Korea’s undervalued financial stocks, the new policy steps have raised doubts as to whether the value-up pledge will hold, analysts said.
