Strengthening
Corporate Banking
KDB Gov. Kim stresses expansion of corporate banking services this year
The state-run Korea Development Bank is stepping up efforts to bolster its corporate banking services to contribute to the development of Korea's key industries and transformation of the nation's industrial structure.
In his inauguration speech, the newly-appointed KDB Governor Kim Chang-lok stressed that the bank would increase its role in the nation's fast-changing corporate banking sector to help the nation enlarge its economic growth potential.
Intensifying competition and further consolidation in the global financial market and the increasing demand for more sophisticated financial products are transforming the global financial services industry. The diversifying needs of clients are calling for financial institutions to offer not only traditional deposit and loan services, but a wider range of financial products such as project financing, mergers and acquisitions and derivatives.
KDB is expanding its "one-stop"universal banking services to meet the increasing demand for more sophisticated corporate banking services both at home and overseas markets. Given that the advanced financial system is inevitable for the further development of the economy, the government has designated the financial industry as a strategic sector and has taken series of measures to transform Korea in a financial hub in Northeast Asia.
The state-run bank's corporate vision , made public under the name of "Vision 2011,"is intended to help KDB effectively carry out its role as a public policy institution and also bolster its competitiveness to cope with the increasing globalization of finance. The Vision 2011 is comprised of two stages. In the first state between 2003 and 2006, it is aiming to strengthen its four core areas of business- corporate banking, investment banking, international banking and corporate restructuring and consulting-and cement its position as Korea's corporate finance leader.
In the second stage covering the 2007-2011 period, KDB aims to become a leading bank in Asia by enhancing its asset quality and profitability to that of global leaders. Based on its strength in core businesses, KDB aims to become a first-tier universal banking services provider by 2011. In pursuit of this ambitious goal, the bank has taken steps to expand its presence in the Northeast Asia region.
To address the growing demand for major infrastructure financing throughout the region, KDB inaugurated the Northeast Asia Development Financing in May last year. Last year, KDB arranged financing for 10 major projects and provided advisory services for 22 new projects. In recognition of the volume of the deals closed, KDB was named No.1 arranger in Asia Pacific and No.6 globally last year. KDB also served as an underwriter. For 20.3 percent of Korea's corporate bonds, making it the largest corporate bond underwriter last year.
KDB's role as Korea's representative bank has evolved over the past five decades. The bank's mandate to enhance the nation' economic development and growth, however, remains intact. The initiatives taken by KDB to normalize troubled companies such as SK Networks and LG Card, for example, have proven to be fruitful. According to KDB's survey of 3,600 companies spanning 83 industries, local companies are expected to increase corporate investment by 5 percent next year.
Spending on equipment and facilities by local manufacturing companies are expected to expand only 0.1 percent, down from an estimated 7.4 percent growth last year. Meanwhile, local non-manufacturers are projected to grow 12.4 percent driven by increased spending in the electricity and telecommunications industries. Polarization between large and SMEs is expected to deepen next year as facility investment of large corporations is set to grow 1.3 percent, while that of SMEs is forecast to contract even further. nw

KDB Gov.Kim Chang-lok