OK Savings Bank reportedly suffered losses of tens of billions of won after investing in single-stock leveraged exchange-traded funds (ETF·Exchange Traded Fund) tied to Samsung Electronics(005930) and SK hynix(000660). OK Savings Bank handed over some of the leveraged products it held to its affiliate OK Capital.
According to the Financial Supervisory Service electronic disclosure system (DART) on the 31st, OK Savings Bank sold its holdings, including "TIGER Samsung Electronics Single-Stock Leverage" and "TIGER SK hynix Single-Stock Leverage," to OK Capital via an after-hours block deal on the 21st. The sale price per unit was 12,410 won for Samsung Electronics and 12,085 won for SK hynix. The total disposal amount was about 10 billion won.
The single-stock leveraged products for Samsung Electronics and SK hynix were listed on May 27. As of the closing price on the 21st of this month, compared with the listing price, Samsung Electronics fell 37% (7,565 won) and SK hynix fell 39% (7,890 won), respectively.
OK Savings Bank did not explain the principal invested or the size of the losses. The industry estimates OK Savings Bank may have lost around 40 billion won. Even after the block deal, OK Savings Bank still holds a total of 43.6 billion won in single-stock leveraged products.
An OK Savings Bank official said, "As stock market volatility has recently increased, we disposed of the holdings in line with internal rules from a savings bank's standpoint," adding, "After discussion, we internally determined that the capital affiliate was the most suitable."
Recently, the savings bank sector has been increasing investments in marketable securities due to deteriorating profitability. According to a disclosure by the Korea Federation of Savings Banks, the balance of marketable securities held by 79 savings banks in the first quarter of this year was a total of 12.1816 trillion won, up 34.6% (3.1299 trillion won) from the first quarter of last year (9.0517 trillion won).
However, concerns are being raised that the higher the proportion of marketable securities held by savings banks, the more exposed they become to market volatility. In particular, some note that caution is needed when investing in products vulnerable to volatility, such as leverage. An industry official said, "The top priority for savings banks is safe asset management," adding, "Direct investment in risky assets like leverage is inappropriate."