Korean banks began compensating investors for HK ELS-linked losses

Shinhan Bank and Hana Bank have begun compensating customers.

Two South Korean banks have began compensating retail investors for losses tied to Hong Kong equity linked securities (ELS), industry sources told Yonhap.

Shinhan Bank and Hana Bank have reportedly provided compensation to some of its customers, the sources said.

Other banks, including KB Kookmin, Woori and HN Nonghyup, are expected to follow suit. 

KB Kookmin reportedly said that it will initially start negotiations with investors who have terminated their accounts since late last year and finalized the value of their losses.

ALSO READ: Average interest rates of new bank deposits in South Korea declines

An average of 40% of investment losses in the ELS products are expected to be covered for each investor.

The Financial Supervisory Service (FSS) has early estimated the investors' losses linked to the ELS products sold by six local banks at KRW1.9t, or 50% of their investments of KRW3.9t.

(The original article “2 S. Korean banks compensate retailers for HK-tied ELS losses” by Choi Kyong-ae was published on Yonhap News Agency).