South Korean banking shares plunge in New York after political push

SEOUL  – Shares of holding companies for top South Korean banks plunged in New York on Wednesday as the banks came under political pressure at home to share more of their income with the vulnerable people.

The American depositary receipts (ADRs) representing top South Korean banks on the U.S. stock market fell as much as 5.8 percent hours after President Yoon Suk-yeol asked banks to strengthen their efforts to help financially vulnerable people.

“The message from the government is that banks are making increasing profits and need to do more for the society,” Lee Byung-gun, head of research at DB Financial Investment, said on Thursday in Seoul. “This is not good for banking shares over the near term.”

The ADRs of KB Financial Group Inc fell as much as 7.1 percent before ending the session down 5.8 percent, and those of Shinhan Financial Group dropped as much as 5.4 percent before closing down 4.5 percent.