MOUNTING JITTERS PROVIDE MOMENTUM TO PRIVATE BANKING IN KOREA.

SEOUL, March 3 Asia Pulse - Worries about North Korea's nuclear program and a possible war in Iraq have dealt a blow to the South Korean economy by shrinking its exports and scaring away foreign investors.

Just like an old adage, "one person's loss is another person's gain," mounting jitters over the two crises are serving as a boon to local banks, which are intent on finding new sources of income.

Banking sources say the market for private banking (PB), which mainly targets the rich, is growing quickly as domestic and external uncertainties are prompting wealthy Koreans to rely on the relatively new service.

"PB is a fast-growing business because it is being increasingly used by rich Koreans," said Kim Ki-rim, an official of the state-owned Woori Bank, which is the flagship of the Woori Financial Group.

In pursuing the potentially lucrative market, domestic banks are targeting customers who deposit between 100 million won (US$84,240) and 1 billion in savings accounts. Banks manage the wealth for fees, offering a range of advisory services such as information on real estate price trends at the same time.

"Customers can earn relatively stable profits by leaving the troublesome job of managing their money to experts," Kim said. "In return, banks can find new sources of income. That's a win-win situation."

Behind the rapid growth of the PB market is a trend called "flight to safety," in which individuals flock to relatively safe financial assets when market jitters intensify, he explained.