Local banks lose 1.2 trl won from derivatives trading in H1

SEOUL, Nov. 15 (Yonhap) -- South Korean banks posted a 1.2-trillion-won (US$1
billion) loss from derivatives trading in the first half of the year due to the
prolonged global financial crisis, a leading financial think tank said Sunday.
Five major domestic banks -- Kookmin, Woori, Shinhan, Korea Exchange and Hana --
recorded combined losses of 1.21 trillion won, according to data by the Korea
Institute of Finance (KIF). Foreign-owned Citibank Korea and SC First Bank Korea,
however, reported earnings of 495.4 billion won, it said.
The seven banks had earned 601.4 billion won from derivatives trading in the
first half of 2008 but lost 406 billion won in the second half of last year, hit
by losses related to currency options known as "knock-in knock-out," or KIKO
contracts, and the global financial crisis, KIF said.
Outstanding derivatives contracts held by all seven banks fell 13.8 percent
on-year to 1,398.4 trillion won as of the end of June, KIF said.
ksnam@yna.co.kr
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