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Article: Gloomy: Korean finance.(South Korean investment banks)(Brief Article)
- Article from:
- The Economist (US)
- Article date:
- July 12, 1997
CopyrightCOPYRIGHT 1997 Economist Newspaper Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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SEOUL
A DECADE ago, South Korea's investment banks were sitting pretty. They earned returns on equity of close to 30% during the bull market of the late 1980s, and celebrated by building themselves marble palaces on Yoido, an island in the Han river near downtown Seoul. But now the investment bankers are grappling with poor earnings and worse prospects. Their very survival is in doubt.
In all, the 34 domestic investment banking houses lost 531 billion won ($592m) in the year to March 31st. Many of their corporate clients are now in considerable financial trouble of their own, which reduces the prospects for new stock and bond underwriting. The crunch will come ...