South Korea’s top lender Kookmin Bank has invested a large amount of money in stocks in an apparent bid to seize on the recent market tumble, industry sources said Thursday.
Kookmin Bank, the flagship of No. 1 bank holding firm KB Financial Group Inc., entrusted its affiliate KB Asset Management with 500 billion won ($460 million) for stock investment, according to the sources.
KB Financial Group Chairman Euh Yoon-dae
It is the first time since the country’s credit card crisis in 2003 that the lender has made a big investment in local equities.
Kookmin reaped huge profits from stock investments following the Sept. 11 terrorist attacks on the United States in 2001 and the credit card crisis.
“The group’s top management recently had a meeting and shared the view that the time is right for stock investment that will bring in profits as well as create synergy among subsidiaries,” a bank official said.
Kookmin’s move comes as the local stock market has been on a roller coaster this week, stung by the first-ever downgrade of the U.S. credit rating and growing worries over the European debt crisis.
The local bourse took a drubbing on Monday and Tuesday before edging higher a day later. In late-morning trade on Thursday, the benchmark Korea Composite Stock Price Index was up some 1 percent from the previous session.
Meanwhile, KB Financial Group Chairman Euh Yoon-dae has purchased 12,560 shares in the group since last week, raising his total holdings to 30,770 shares.