A Cause for Double Celebration

Daegu Bank gets a boost in credit rating to A2 as it celebrates its 40th anniversary

Moody's International Credit Agency has upgraded the credit rating of Daegu Bank to A2 from A3 on July 25, the bank said recently.
Moody's has boosted the bank's credit rating two times this year starting from May when the credit agency raised the credit rating to A3 from Baa2.
The bank said its new credit rating is the same as the sovereign credit rating for Korea and the highest that the bank got so far. The bank also said the credit rating boost also tells that it has successfully maintained its leadership in the local financial market with excellent profit, an outstanding capital base, sound asset management and other performance indicators have reached an international level.
The bank also said its cost of borrowing would be lessened now that its credit rating has been raised. The higher credit rating also helped raise the price of its shares on the stock exchange. The share price rose to 19,950 won per share on July 25 and it is expected to climb to 20,000 won per share for the first time since January 1990, in 17 years and 6 months.
Daegu Bank, in the meantime, held investor rounds on July 19 at the CCMM building in the Yeouido District in Seoul before some 70 analysts, and institutional investors. The bank announced at the meeting that its H1 net profit amounted to 160.8 billion won, up 14 percent from the same period last year.
The excellent performance is owed to the bank's preparation to cope well with rapid changes in the financial environment by shifting to an emergency operation mode from March to strengthen its operations and diversify income sources and tough risk management bringing down the loan loss provisions. The bank said the profit before the provision amounted to 238.4 billion won, up 8.5 percent from the same period last year.
The ratio of non-performing assets amounted to 0.7 percent, loan default ratio 0.63 percent and the ratio of loan loss provision 180.2 percent to boost the soundness of asset. The BIS ratio also rose to 11.75 percent.
The bank's total assets increased to 23.991 trillion won, up 11.1 percent from the same period last year, with total deposits rising to 18.6 trillion won and total loans outstanding to 14.2 trillion won, rising 12.7 percent and 18.2 percent respectively from the same period last year, showing that the bank has been growing in a healthy way in the Daegu and North Gyeongsang Province region.
Kim Byung-tae, manager of the bank's management information headquarters, said the bank will continue to carry on with the emergency management program to strengthen its basic management structure, expand non-interest income, and reduce the ratio of loan loss provision and cut costs, in addition to boosting productivity. He said the bank should achieve its target of raising its net profit to the level of 280 billion won this year to become a globally superior provisional bank.
The vice president also said the bank should not only realize an outstanding performance record, but also expand the ethical management and make contribution to society in a diversified manner to do full its social responsibility as a business entity.
The bank, in the meantime, has gone all out to support small and medium firms in a diversified manner to spur the vitality of local economy in the face of continuous boosts in interest rates, the appreciation of Korean won and increased oil prices.
The bank concluded business tie-ups with 7 regional chamber of commerce and industry in such cities as Daegu, Kumi, Pohang, Kimcheon, Andong, Kyungsan, and Youngju and has been providing special loans to small and medium-sized companies in those cities by launching such loan products as DGB Cash Plus Serp'a cash management service for small firms and "B2B Purchase Fund Loan"an online loan service to those small companies in need of funds for purchasing.
In March, the bank, Daegu city and the Korea Credit Guarantee Fund signed an agreement to provide financial support for the growth of small and medium-sized companies, especially, to those SMEs with dedicated social contribution responsibility by giving them extra points to credit analyses.
The bank has also been strengthening its ties with small companies through "CEO Marketing"searching for new ways to provide financial services to them and holding meetings with small business owners to provide them with various consulting, financial information and accounting consultancy in a comprehensive financial services.
President and CEO Lee Hwa-eon said the bank will stick to its management to lead itself close to the local business community by visiting excellent corporate customers and listen to their problems and work out solutions with them to realize the dreams to bring affluence to the local community. nw

President & CEO of Daegu Bank Lee Hwa-eon.