With the Hong Kong equity-linked securities (ELS) penalty surcharge risk easing sharply, bank stocks were all strong early on the 5th.
As of 9:40 a.m., KB Financial was trading at 172,200 won, up 8,000 won (4.87%) from the previous session in the KOSPI.
At the same time, Shinhan Financial Group (6.49%), JB Financial Group (2.71%), Woori Financial Group (4.28%), and Hana Financial Group (2.99%) were also strong.
It is interpreted as the effect of the Financial Supervisory Service (FSS) the previous day sharply lowering to about 600 billion won the penalty surcharge to be imposed on five banks—KB Kookmin, Shinhan, Hana, NH Nonghyup, and SC First—over misselling of Hong Kong H-share index (Hang Seng China Enterprises Index) ELS.
The penalty surcharge, initially calculated at about 4 trillion won, was lowered to 2 trillion won during discussions, and in Feb. a sanction plan of about 1.4 trillion won was forwarded to the Financial Services Commission (FSC). With this decision, the penalty surcharge has been reduced by more than 85% from the initially calculated amount.
The results of this FSS sanctions review will be finalized after a resolution by the Financial Services Commission (FSC).