Leader among Provincial Banks
Daegu Bank eyes to diversify profit sources and upgrade its Seoul Office

Daegu Bank, the first local bank to be established in October, 1967, has been serving the financial needs in Daegu City and the North Gyeongsang Province, fulfilling its mission to the full.
During the Asian financial crisis in 1978, the bank overcame the financial restructuring and survived without the financial support from the government, keeping its reputation as a sound financial institution in the region.
In 2005, the bank recorded net profit of 175.3 billion won, the largest in its history, up 42 percent year-on-year. The record is noteworthy since it came after the loan loss provision ratio of 172 percent with the addition of 60.8 billion won last year.
The bank's total assets amount to 20.5 trillion won, exceeding 20 trillion won for the first time as a provisional bank. The bank's capital amounted to 150 million won when it opened for business in 1967, with 300 million won in deposits. But its deposits totaled 16.8 trillion won at the end of last year with outstanding loans totaling 11.5 trillion won, leading the rate of growth in the nation's banking community.
Its non-performing asset ratio stood at 0.97 percent and the loan delinquency ratio of 0.99 percent, securing the top level soundness among banks with the BIS ratio coming in at 11.33 percent.
Underneath the outstanding performance is the bank's management strategy for serving the region closely. The bank's management ideal that reads, "Dreams and Affluence with the Region,"says all about the bank's management strategy. Since its opening, the bank as a local citizen with its home base in the region, has strengthened its ties with the region and has made contribution to the regional society in a positive manner.
Under a slogan of "Innovative Value Management for Sustainable Growth,"the bank has set the target for this year including over 220 billion won in net profit and more than 1 percent in ROA under its offensive operations. "Maximization of Business Capacity," "Advancing Profit Structure,"and "Maximization of Potentials"have been made the three largest strategies for the bank. The bank plans to increase its total assets by 6.3 percent to 21.8 trillion won, net profit increase of 25.5 percent in the amount of 220 billion won and non-performing asset ratio of 0.94 percent this year.
MANAGEMENT INNOVATION. Following his inauguration as the president of Daegu Bank, President Lee Hwa-eon introduced steps designed to reinvigorate the bank's constitution, including the early retirement of 131 employees. Half of the newly-hired unit chiefs have been appointed under a publicly contested hiring system.
Daegu Bank conducted a reorganization in which the bank abolished the president secretariat, created the strategic coordination office in order to strengthen coordination among divisions, and established the first and second headquarters with an eye to securing a bridgehead in the North Gyeongsang Province area. The bank also introduced a business process re-engineering (BPR) system to revamp the banking transaction process.
The bank also has broken the mold in personnel management as it appointed fund and foreign exchange experts from Citi Bank as executives of the bank.
CEO Lee sends CEO Letter messages containing management philosophy, management policies and his personal stories under the column "My Story"through the companywide intranet week in a bid to ensure open management and facilitate mutual communication. He took the initiative in making the organization a vivid and dynamic worksite as he mingled with junior officials through such activities as mountain climbing and his unprecedented meeting with junior officials.
Under the so-called "FUN Management"strategy, Lee has sent flowers in the name of the bank president to boost the morale of the bank's employees and invigorate the organization. An executives'meeting has been readjusted to end before 9:30 a.m. when the bank opens its doors to embark on business as part of its efforts to streamline business practices.
The bank has implemented an advance notice system on personnel changes as part of its efforts to ensure an open personal management and minimize the vacuum created by personnel reshuffles.
Daegu Bank has focused on three employee-oriented policies - compensation based on the merit system, fostering world-class manpower and recognizing employees as business partners. To this end, the bank introduced the DGB Sales Superstar Award for the first time this year and offered 30 million won in a prize reward and special promotions. The bank has doubled the budget for commissioning employee's studies at home and abroad. As part of its efforts to spread the
"UN Management"strategy, the bank has included the matter as one of categories of assessing executives and facilitated conversations with employees. nw

Daegu Bank President Lee Hwa-eon