Watchdog slashes fines on 5 banks over mis-selling of HK-tied derivatives

A person walks in front of major banks' ATM booths in central Seoul on Feb. 22. [NEWS1]

Five banks were slapped with some 600 billion won ($393 million) in penalties by the financial watchdog Thursday over their mis-selling of equity-linked securities (ELS) products tracking Hong Kong’s Hang Seng Index.

The amount is a sharp cut from the initial 1.2 trillion won fine on the five lenders — KB Kookmin Bank, Shinhan Bank, Hana Bank, NH Nonghyup and SC Korea — which had already suffered massive losses as they had compensated customers over the mishap, according to the Financial Supervisory Service (FSS).

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Last month, the Financial Services Commission (FSC), Seoul's financial regulator, tossed the watchdog's proposed penalties back, saying that some legal issues should be further reviewed.