For Strong
Overseas Base

Kookmin Bank to strengthen international operations to expand profit

Kookmin Bank will build a system to launch its banking business in southeast Asia in the next two to three years, said the bank's President and CEO Kang Chung-won while explaining the bank's plan for the new year.
The CEO of the largest commercial bank in the country said the bank has completed its plan to launch its overseas operations.
He has been called by various nicknames that stuck with him along the way of managing the largest retail bank in the country since he came to the bank as its CEO in 2004. "Mr. global standard"is one, and "Mr. best practice"is another to name just two because he has always stressed to bank employees in an effort to bring synergy to the bank after its mergers with the Korea Housing Bank and Kookmin Credit Card. Since his take over of the bank's management in 2004, CEO Kang has successfully managed to merge the labor unions of the three companies into one and for the first time, net profit of the bank exceeded two trillion won in 2005.In addition Kang also played a big role in Kookmin nomination as the priority bidder in the bidding for the Korea Exchange Bank in March last year, although the MOU signed with the KEB has now been invalidated due to the prolonged investigation into Lone Star, the U.S. hedge fund's purchase of the KEB in 1998 during the financial crisis.
The prosecutor's office has been probing the circumstances under which the U.S. hedge fund was able to take over the bank, although the bank's operation was considered sound at the time.
Prosecutors have been focusing the probe on the low BIS of the bank although it was considered much higher at the time of the sale. They suspect some one actually manipulated the bank's BIS ratio lower than it actually was to justify the bank's sale to Lone Star. Lone Star opted to not to extend the validity of the MOU with Kookmin in November last year with the validity running out.
With the attempt to expand Kookmin's domestic operation hitting the wall,
CEO Kang has decided to focus on overseas operations to increase profit for the bank in the future.
"From a long-term prospective, the bank has a better chance to increase its profit at overseas than at home,"President Kang concluded to explain the bank's swift turn to overseas for expanded profit.
The top manager of Kookmin Bank is cautious about the bank's moves to expand its overseas operations and go slow on such big moves as mergers and acquisitions overseas. But it does not mean that the bank has given up on its attempt to acquire KEB. The bank will again make bids if KEB is put on the sale block because it has already spent a year to wait for the time to take over the KEB with strong corporate banking operations. The CEO is certain that Lone Star would still think of Kookmin as the potential buyer because it once signed the agreement for take over with Kookmin only a year ago, although it was blocked due to the investigation.
Kang will be out to tighten the bank's operation, especially, the management of loans, aware that the domestic economy will be sluggish, which will hit the bank's profitability and soundness.
CEO Kang said he doesn't think the banks would try to focus on quantity growth as they did last year, but compete on quality growth this year, looking at overseas financial markets to expand their operations and find "Blue Ocean"in new niche markets where competition will grow harder.
This year's management strategy is "growth under control"with the bank planning to attain just average growth in the areas of housing mortgage loans and loans to SMEs and work hard to expand the growth in individual credit loan, SOHO and credit card loan.
CEO Kang denied rumors that Kookmin plans to take over securities and stakes in other banks such as the Industrial Bank of Korea and Woori Bank. He said the bank has never contemplated taking over of a securities firm in detail.
Kang's 3-year term of office expires in November, but he plans to continue to consolidate the bank's operations so that it could still be the largest and representative bank in the country even 10 years from now. nw

President and CEO Kang Chung-won of Kookmin Bank

Kookmin Bank employees including 12 foreign employees that the bank hired for the first time take a 100 km walk at the end of last year.