[Edaily Reporter Kim Kyung-eun] Bank stocks are rallying across the board as the risk of fines related to Hong Kong ELS products has significantly eased.

According to MP Doctor, as of 9:04 a.m. on the 5th, #Jeju Bank is trading at 11,160 won, up 1,160 won (11.60%) from the previous day. Major financial holding companies such as #Shinhan Financial Group (4.20%), #JB Financial Group (3.87%), #Woori Financial Group (3.78%), #KB Financial Group (3.35%), and #Hana Financial Group (2.82%) are also all trading higher.

Yesterday, the Financial Supervisory Service (FSS) significantly reduced the fines it plans to impose on five banks—KB Kookmin, Shinhan, Hana, NH Nonghyup, and SC First—to approximately 600 billion won in connection with the mis-selling of Hong Kong H-Index (Hang Seng China Enterprises Index) equity-linked securities (ELS). The fines, initially estimated at 4 trillion won, were reduced to 2 trillion won during discussions, and in February, a proposal for sanctions amounting to approximately 1.4 trillion won was submitted to the Financial Services Commission (FSC). With this decision, the fines have been reduced by more than 85% compared to the initial estimate.

This is the result of the FSS significantly lowering the level of sanctions, taking into account the banking sector’s explanations and the unique circumstances of the early implementation of the Financial Consumer Protection Act. Although fines exceeding 1 trillion won had been discussed, the easing of sanctions is expected to significantly reduce the capital burden on the banking sector. The FSS’s sanction review results will be finalized following a resolution by the Financial Services Commission.