00:03korea's capital firms just leaned harder into short-term debt and that's a warning sign for
00:08their funding structure short-term bond issuance at korean capital companies jumped 35 percent by
00:14the end of june their dependence on short-term debt rose 1.5 percentage points to 7.2 percent
00:20that shift is widening the maturity mismatch as high interest rates push up their financing costs
00:27separately foreign banks operating in korea posted first half net profit above 1.2 trillion won
00:34leaning on foreign exchange and derivatives trading it's wednesday september 9th let's break
00:40down what's happening in korea's financial sector capital companies are increasingly relying on
00:45shorter maturity bonds even as their overall borrowing costs climb that combination is
00:51squeezing their margins just as competition in the sector intensifies here's what the numbers show
00:5635 percent that's how much short-term bond issuance rose among korean capital companies by the end of
01:03june their short-term debt dependence climbed 1.5 percentage points to 7.2 percent over the same
01:10period the widening gap between short-term and long-term borrowing costs is worsening their
01:16overall maturity structure according to today's report separately foreign banks in korea posted first
01:23half net profit above 1.2 trillion won driven largely by foreign exchange and derivatives income
01:30so what does this mean for financial sector analysts tracking korea earlier we said capital companies are
01:37leaning harder into short-term debt as financing costs rise here's what that actually means for you
01:43a widening maturity mismatch under high rates raises refinancing risk for these firms if short-term
01:50funding costs stay elevated into next year that risk sits in contrast to foreign banks in korea which
01:57are posting strong profits from trading activity rather than lending growth three things to watch first
02:04whether korean capital companies short-term debt dependence keeps rising past 7.2 percent second
02:11how regulators respond to the widening maturity mismatch in the capital finance sector third whether foreign banks
02:18sustain their fx and derivatives driven profit growth into the second half that's today's ai prism
02:25finance daily this episode was produced with ai assistance based on seoul economic daily reporting
02:32and reviewed by a human editor ai prism is a juan ifra award-winning series we'll be back tomorrow
02:41doing theirнизm
02:41video
02:42and
02:42video
02:42video
02:42video
02:42and
