Banks on the Roll
Korea Federations of Banks to extend help to member banks to globalize
Chairman of the Korea Federation of Banks Yoo Ji-chang said in his new year's message, that last year was a very good year for banks, with record profits, and high soundness, generating superb management indicators owing to strong restructuring and efforts of bank employees. But it was also the year when the necessity for overall change emerged with banks reaching the point where their profits faced limits, lurking structural reform for quality and intensified competition in the industry.
It was also the year for member banks attempting to renew their approaches to cope with demands for strengthening banks'public nature, the KFB chairman said.
For KFB, it was the year for change and reform. It was the initial year for KFB to take a step to become the highest financial federation leading the banking industry, with its officers and staff busy providing heightened services to member banks and upgrading their capabilities, Yoo said.
We at KFB should also try to lend help to member banks by faithfully executing our given mission in steps with their determination to make this year a superb one.
He said KFB's mission for this year will be to lead the effort by member banks to be loved by their customers. Maintaining friendly relations with their customers has become a key factor in stiffening competition among banks amid rapid changes in the financial market to be a customer-centered one. The situation was brought on by unlimited competition in the financial industry with financial institutions allowed to take on multiple businesses. We have to remind member banks on the public nature and social responsibility of their roles so that their relationships with customers can be solidified further, he said.
The KFB chairman also said KFB should strengthen its efforts to help member banks diversify their profit sources to the extent they will be able to build the best profit structures. Yoo said the banking industry has been having tough time to secure Blue Ocean due to a herd behavior which intensified competition in the limited market. He said FKB should deepen its role to widen the financial market centered around the inter-banking businesses including mergers & acquisitions, social overhead capital investment, derivatives, and other cross-over products. We also have to help member banks in building their bases for globalization this year with many foreign financial organizations setting up shops in the country this year attracted by the government policy to make Korea a financial hub in Northeast Asia. KFB should lend a hand to member banks in their efforts to expand their operations to develop new products and improve risk management intended to enhance their international competitiveness and enter future growth market as early as possible.
Yoon Jung-hyun, chairman of the Financial Supervisory Commission, said in his speech at the new year reception, that the profit of the banks has made a substantial increase last year due to hard work put in by all bank employees. But he said they have tough work ahead this year, including strengthening of risk management through correct credit analysis to prevent potential bad loans. The banks would have to consider high oil prices, interest rates and the exchange rates in their management plans for this year to prepare for a possible crisis. He recalled that the stability and soundness of banks have made a great improvement since the foreign exchange crisis through restructuring to the extent that their profitability has been enhanced enough to pave the way for their progress toward becoming an advanced bank. With the economy showing signs of improvement, banks ought to become a national strategic industry, creating value-added work with autonomy and creativity as a base this year, the chairman said. nw

Heads of member banks and dignitaries, Deputy Prime Minister Han Duck-soo and FSC Chairman Yoon Jeung-hyun, among them, drink toasts to ring in the new year at a reception hosted by the Korea Federation of Banks headed by Chairman Yoo Ji-chang.