New Vision on 46th Anniversary

Industrial Bank of Korea declares goals to beef up its assets to 200 trillion won by 2011

President Kang Kwon-seok of the Industrial Bank of Korea, during the ceremony for the bank's 46th anniversary on Aug. 1, declared a new vision dedicated to boosting its total assets to 220 trillion won by 2011 and market value to 20 trillion won to develop itself to be a top integrated financial group in the country,.
President Kang said the IBK is faced with a gigantic challenge of coping with great changes to be brought on with the implementation of the Capital Markets Consolidation Act in 2009 including the emergence of a large integrated investment bank and its privatization from a government-owned financial institution to a private bank. He said what are needed the most at this stage for the bank include continuous reform, changes and strengthening of each individual workers capabilities.
Becoming a top integrated financial institution has been set as the bank's new mid-term goal, which should be backed up with the bank continuing to maintaining its competitiveness for successful privatization, its balanced growth, turning IBK to grow to be an integrated financial group, and its globalization.
The IBK held a dedication ceremony for Entrepreneurship Hall of Fame to honor the CEOs of SMEs in recognition of their achievements in leading their SMEs to become a global concern.
President Kang has much to celebrate these days. He became the first IBK president to be retained for the second term, despite the tradition that no CEOs of government-owned financial institutions would be allowed to comeback for second term. His reappointment goes without saying that was due to his excellent record of running the bank during his firsts term of office. For the first time, the bank's total assets went over the 100 trillion won mark and loans over 90 trillion won with a net profit of 1 trillion won. In the first half, the IBK was the top bank in the growth of deposits and loans among domestic banks, with deposits rising 12.5 percent from the end of last year.
At the end of last year, when the bank drew up its management plan for this year, the CEO set raising deposits as the number one priority in the plan instead of providing loans to promising SMEs and it has been proven to be a right move because depositors began to withdraw their money from the deposit accounts at banks to invest in stocks and President Kang is moving further to stem the outflow of bank deposits. He told his staff to come up with measures to prevent the money in the low-interest demand deposit accounts from being taken out of the accounts in droves. The bank is ready to announce a new product to pay a higher interest rate on demand deposits held by salaried people so that the bank would keep their money in the deposits longer from this month.
The eyes of the financial circles have been fixed on the IBK in recent months. The bank announced that it will enter an insurance and securities businesses to be able to offer an integrated financial service. Kang noted that the price of a securities firm has risen too high and the bank has enough funds to take over a securities firm in M&A, but a wiser move is to set up a new securities firm, he believes. He also thinks that it is not too late to think about the move on insurance after the bank makes its decision on securities firm first.
President Kang also is considering to separate its credit card business from the bank, which has been taken up by the matters related to becoming an investment bank. IBK upgraded its financial headquarters to the IB headquarters and strengthening its manpower.
The bank has 480 listed companies among its corporate customers with 460 firms qualified for initial public offering, in addition to 2,800 to be able to offer IPOs in the next five years, making IBK the best bank to be an investment bank.
The bank will try to increase the revenue from its non-banking sector to 25 percent of its total revenue from the current 10 percent by boosting the operation of the IB, bancassurance, credit card, trust and others.
The bank will also speed up its overseas operations with its focus on its China operations including its branches in Tianjin, Qingdao, Shenyang, Yentai, and Hong Kong, with the license for its Ssouchao branch already in the bag.
Within this year, the bank will set up its Moscow branch and upgrade its office in Ho Chi Minh City to branch part of its plan to quicken its entry into the emerging market countries.
President Kang has opted to take over a financial institution in a foreign country or hold stakes rather than setting up a new financial subsidiary in a foreign country as a means to beef up its overseas operations. He is ready to travel to New York to conduct the non-deal road show by himself. The bank will also issue a $500 million bond at Libor+25 bp, the lowest for a Korean bank in the second half. nw

President Kang Kwon-seok of Industrial Bank of Korea (IBK)