The pangovernmental moves to “advance Korean markets to a financial hub in Northeast Asia” will gain steam, riding on the inter-Korean thaw in the wake of this year’s third inter-Korean summit, South Korea’s Financial Supervisory Service Gov. Yoon Suk-heun told heads of foreign financial units in Korea on Wednesday.

The remarks came as South Korea President Moon Jae-in and North Korea leader Kim Jong-un signed a joint agreement to reboot plans for bilateral business cooperation, including the resumption of the Kaesong industrial park and construction of an inter-Korean railway.

“As the inter-Korean business cooperation is increasingly becoming a reality, a pangovernmental endeavor to advance the Korean market to a financial hub of Northeast Asia will continue,” Yoon said in an opening speech at a luncheon meeting. Representatives of 24 firms -- nine overseas banks, nine financial investment firms and six insurance companies -- attended the financial watchdog’s event held in Seoul.

Yoon also said the move is a consistent pursuit of a “road map” to a financial hub in East Asia created in 2003.

In addition, the faster pace of aging in South Korean society has been behind a recent growth of the asset management market as indicated in record-high assets under management in Korea, he said.

“Korean society is aging faster, and we see growing pensions demand here. ... Prospects for the Korean assets management market are bright.”

As of the second quarter, the volume of won-denominated AUM – the sum of private and public fund assets and assets under discretionary management -- hit a record-high of 1,010 trillion won ($901 billion), marking the first time for it to top 1,000 trillion won, according to the FSS’ preliminary data.

Privately offered funds, publicly offered funds and discretionary assets rose 5.1 percent, 1.7 percent and 2.2 percent on-quarter, respectively.

Such assets were managed by 228 companies, among which 137 were in the black in June.

On the other hand, Yoon pointed to stagnantion in the number of foreign financial firms, from 164 in 2014 to 165 in 2017. Over the cited period, the combined total asset of all companies jumped 19.5 percent.

From 2014 to 2017, the Korea entry of firms like State Bank of India, Bank Negara Indonesia, the US’ Northern Trust, ING Securities and Taiwanese Yuanta Securities was offset by the withdrawal of companies like Bank of Brazil, Spain’s Santander Bank, UK’s Barclays Capital Securities, Barclays Bank and Zurich Insurance,

The meeting was the first since Yoon took office in May. Yoon is the third FSS governor during the Moon Jae-in administration.

By Son Ji-hyoung 
(consnow@heraldcorp.com)