Foreign financial firms send W1.2tr back home a year
[THE INVESTOR] Foreign financial firms operating in Korea have sent an average of 1.2 trillion won (US$1.08 billion) in dividends and royalties a year to their home countries, industry data showed on July 9.
In total, 102 companies have sent 6.78 trillion won to their headquarters in the past five years from 2013 to the first quarter of 2018, according to data compiled by Financial Supervisory Service submitted to Rep. Park Yong-jin of the ruling Democratic Party of Korea. They include 40 banks, 11 brokerage firms, 28 insurers and 23 asset management firms.
The payments -- which include profits, dividends, royalties, advertising, headquarter expenses, consulting and data processing fees -- came to 1.03 trillion won in 2013, followed by 810.6 billion won in 2014, 1.58 trillion won in 2015, 1.34 trillion won in 2016 and 1.39 trillion won in 2017.
This year, the amount is expected to rise further as the sum came to 631.2 billion won from January to March, more than half of the annual average in the past five years.
When breaking down, banks sent a hefty 3.46 trillion won in the past five years, taking up more than half of the total amount. Foreign brokerages transferred 1.7 trillion won, followed by insurers with 1.2 trillion won and asset management firms with 391.5 billion won.
Standard Chartered Bank Korea sent the largest paycheck home of 878.8 billion won in the last five years, followed by HSBC with 830.2 billion won, Citibank Korea with 471.3 billion won and JP Morgan with 162.8 billion won.
Industry watchers raised concerns about foreign institutions taking away all the profits made in Korea, while giving back less to the local economy and cutting more jobs.
“Despite criticism, foreign financial firms are continuing the predatory practices of transferring funds to their headquarters,” said Rep. Park. “We are planning to introduce a bill that could make them reinvest part of their profits in Korea or create more jobs.”
By Ahn Sung-mi (firstname.lastname@example.org)