New Foreign Dividend Record: $7.5B

Reports show that last year’s total amount of dividends paid to foreign investors by domestic companies exceeded Korea’s annual current account surplus.

According to the Bank of Korea (BOK), the total dividends taken by foreign shareholders were $7.579 billion, up by $260.5 million (3.6 percent) from last year, an unprecedented record. The figure is even more than last year’s annual current account surplus, $6.093 billion.

The number has increased annually since the BOK began its statistics related to the foreign dividends in 1995. The foreign dividends declined only in 1998 when domestic stock prices plummeted.

Particularly, in 2003, when foreign speculators outspokenly expressed a desire to participate in the management of major domestic companies, the total amount was $3.567 billion, up 46.0 percent from the previous year. In 2004 and 2005, it went up 40.6 percent and 45.9 percent, respectively.

The increase had an impact on the worsening of the country’s current account balance.

Last year, total foreign dividends accounted for 25.9 percent of Korea’s trade surplus, amounting to $29.214 billion.

Meanwhile, interest income earned by domestic investors, such as interest on foreign bonds, reached $10.54 billion, exceeding $10 billion for the first time.

jinhup@donga.com