On the Road to Expansion
NACF plans to set up banking branch in New York, rep office in Shanghai
The National Agricultural Cooperative Federation (NACF) has a thriving banking department as active as commercial banks in the country, although it remains very much unnoticed by the public. Its total banking assets amounted to 148 trillion won as of the end of June, up 7.4 trillion won from the end of last year. "The Banker,"an international magazine on banks, listed Nonghyup among the 90th largest financial institutions in the world at the end of last year. Its assets are projected to jump to 155 trillion won at the end of this year.
Its deposits totaled 107 trillion won as of the end of June, an increase of 7 trillion won from the end of last year and by the end of this year; it is projected to hit 114 trillion won, a growth of 7.2 percent on a year to year basis.
In the area of credit & banking, NACF dished out 85 trillion won in loans as of the end of June, up 6.3 percent from the end of last year and it is projected to reach 90.5 trillion won this year. Its project financing loans amounted to 3.196,2 trillion won as of the end of June, up 19.4 percent compared to the same period last year. NACF also invests and makes loans in international financial markets, which totaled $2.016 billion, up 37.1 percent at the end of June from the same period last year. Its private equity fund and investments in venture capital firms amounted to 100.8 billion won as of the end of June, up 39 percent from the same period last year.
The mutual financing sector's deposits and loans came to 222 trillion won including 131 trillion won in deposits and 90.9 trillion won in loans. The sector aims at 140 trillion won in deposits and 100 trillion won in loans by the end of this year.
In order to be well prepared for changes in the financial business environment in the country, the credit & banking department has reorganized its set up. It has cut the office procedures by a step by setting up teams, instead of sections, to speed up approval procedures. It has also set up a corporate marketing team to strengthen its corporate banking sector with the number of branch offices with the corporate banking business increased to 40.
The department in charge of the private banking and CRM has been merged to invigorate the CRM activity and build a sustainable support system. The banking department also plans to reduce the support activity for business branches to give more energy to sales and meetings with customers through the business process reengineering (BPR).
The business of fund management dispersed throughout the department was integrated under the fund management headquarters to maximize profits and strengthen responsible management system. The derivative commodity development team was set up to cope with various financial needs of customers.
The department also plans to established the mutual finance headquarters, which will lead to the strengthened function of the mutual finance federation and its head was given a large approval authority to commensurate with the scale of its 200 trillion won in assets. The headquarters will be made competitive to give support to regional member coops. branches under an effective lead and support system build-up.
The department also has been considering a plan to make advances overseas out of the need to provide support for exports of farm produce and cope with changes in the financial environment. A branch is planned to be set up in New York and a representative office in Shanghai, China, under a gradual step in consultations with concerned authorities.
NACF will build a financial system tailored for farmers'needs and changes in the agricultural communities in the country, along with plans to expand the agricultural financing consultation services to improve farm household finances around the country.
Under the long-term credit & banking business development plan, the credit department will try to be among the 60 largest financial institutions in the world by 2010 with the ratio of non-performing assets below 1 percent. It will try to build an integrated financial group ultimately. Its assets would total 205 trillion won by 2010 as a representative financial institution in Northeast Asia with S & P credit rating of A+. Agricultural financing will be the root of its credit business and the farm financial support system segregated from commercial finance. NACF's credit & banking department will try to be an independent financial unit and not rely on government policies by finding its own support businesses for the farm communities in the country. It will also implement the government 119 trillion won in investment and loans to farmers without hitches. It will ultimately operate card, securities, insurance and banking businesses as its core areas of business. nw
President & CEO Chung Yong-keun of NACF Credit and Banking Department