Analysis of subscribers from five major banks
There are a lot of elderly people… 23 people in their 90s
Individual investors who invested 42.4 billion won
Hong Kong ELS lost 471.5 billion this year
If there is no rebound, 4 trillion is expected to be gained during the first half of the year.
The top 5 banks pocketed 314.8 billion in fees
Bok-Hyeon Lee “Incomplete sales confirmed”
Although large-scale losses are expected in equity-linked securities (ELS) that use the Hong Kong H index as an underlying asset and financial authorities have confirmed some mis-selling, the five major banks (KB Kookmin, Shinhan , Hana, Woori, and NH Nonghyup) are concerned The number of seniors in their 70s or older who invested in products was confirmed to be more than 17,000.
According to data presented by Maeil Business Newspaper on the 6th by the Financial Supervision Service through People Power Party lawmaker Yoon Ju-kyung, a member of the Political Affairs Committee of the National Assembly, at the end of November last year, 150,000 people had subscribed to ELS-related products with the H index as the underlying asset in the five main banks, there were 3,109 people. 17,067 people were in their 70s or over, or 11.1% of the total. Of these, 1,228 people were in their 80s and 23 people were in their 90s or older.
There has been criticism that banks have sold a large number of high risk products to elderly people who do not have enough knowledge or information about derivatives. Lee Bok-hyeon, head of the Financial Supervision Service, said, “(After conducting an on-site investigation), we confirm cases of inappropriate sales to the elderly,” and added, “We need to consider whether it is financial. companies too busy paying fees that are immediately visible to them.” Rep. Yoon said, “The older people are, the greater the possibility of information asymmetry and incomplete sales, and as maturity approaches day by day, financial authorities must quickly complete audits and investigations of civil complaints,” adding , “The sale of high-risk products in banks needs to be revisited.” “It does,” he claimed.
Mr A, in his 70s, asked for a recommendation for a stable investment product in preparation for retirement, but claimed that a bank employee had recommended the Hong Kong ELS H-index product, saying it was a “non-loss product ,” and changed his investment trend arbitrarily. In addition, Mr B, a man in his 80s, claimed he registered for the product through one of the five major commercial banks to manage his retirement funds, but did not sign the subscription documents himself and that a bank employee signed on his behalf .
However, the age group that invested the most in the ElS Hong Kong H Index products of the five major banks were those in their 50s and 60s. Investors in their 50s accounted for the largest proportion, at 30.6% (46,790 people), and those in their 60s accounted for a similar amount at 29.5% (45,231 people). Those in their 40s were 15.3% (23,478 people), and those in their 20s were 5% (7,724 people). There were 2,541 people under the age of 20. Minors cannot register for ELS-related products on their own and must be represented by their parents or guardians.
Hong Kong’s H Index, which surpassed the 12,000 mark in February 2021, is showing weakness, falling to the 5,300 level on the 5th, causing losses in related ELS. Hong Kong’s H-index ELS sales balance across the financial sector as reported by the Financial Supervisory Service is KRW 19.3 trillion, of which KRW 15.4 trillion, or 79.6% of the total balance, is expected to mature this year. The volume maturing in the first half of the year also amounts to 8.4 trillion won. From the 5th, the confirmed loss of Hong Kong H ELS Index in the five major banks amounted to 471.5 billion won. If the H index remains at the 5,300 level, a loss of 4.2 trillion won is expected in the first half of this year alone.
The five major banks were found to have earned 314.8 billion in fee income from ELS-related products alone with the H index as the underlying asset over a four-year period from 2020 to the end of November 2023. In a bank , KB Kookmin Bank, which sold the most ELS-related products, earned KRW 183.4 billion from selling ELS H-index products alone, followed by Shinhan Bank (KRW 51.6 billion), NH Nonghyup Bank (KRW 43.4 billion), Hana Bank followed (KRW 35.8 billion), and Woori Bank (KRW 35.8 billion).600 million).
There were also cases where large sums of tens of billions of won money were invested in Hong Kong’s ELS H Index. According to data presented by Rep. Yoon from the Financial Supervisory Service, an individual investor invested 42.4 billion won in ELS with the H index as the underlying asset in 2021. 2021 is the time when the H index rises to 12,000, and if the investor does not this repays at maturity, it will suffer a loss of about 20 billion won. In 2020, one individual burned 37.3 billion worth of ELS products. It is evaluated that it is unusual to ‘spend’ this amount of money on derivatives. [박인혜 기자 / 박나은 기자 / 유준호 기자]
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