KB's CEO Reappointed

President Kang has formidable tasks ahead during second term in office

President Kang Chung-won of Kookmin Bank has been retained to serve a second three-year term as the CEO of the largest retail bank in Korea at the bank's shareholders'meeting on Oct. 31.
His reappointment shows the confidence that the shareholders'have in his management ability shown during the first term. He has been credited with smoothing out the merger of Kookmin and the Korea Housing Bank, especially regarding the labor unions of the two banks, laying the base for the expanded bank to keep going as the largest retail bank in the country. Kang's tasks ahead for him to take charge are also formidable. He will continue to have to pursue the take over of the Korea Exchange Bank, despite reports have that Lone Star, the U.S. hedge fund, which holds a majority share of the bank, has concluded a contract to turn over the majority stake in KEB to the Hong Kong Shanghai Banking Corp.(HSBC). But Kookmin still has a chance to take over the bank as the contract with HSBC would be only effective after the court ruling on the legality of Lone Star's 2003 take over of KEB.
He also has to continue to lead Kookmin down through the path of its long-and-mid-term vision to be a global bank leading Asian financial markets, among others. The bank has to secure professional manpower and systematic capacities to be able to become a global-level financial service provider. It has to provide top comprehensive financial service to its customers.
Through the scales of economy and territory, the bank will attempt to be a first-class global bank by securing organic growth in the areas of banking, securities, insurance and asset management and at the same time attain in-organic growth in the sectors of M&As and strategic alliances to be able to provide complex financial service for the maximization of synergy and customer value.
Kookmin Bank plans to build an effective and futuristic financial service supply system which calls for joint resources utilization, sale, service production, and financial products in mid-and long-term strategies. Sales channels will be improved to the extent of customers and service characteristics such as life-care financial service provider, business-care financial service provider, wealth-care financial service provider, and equity-care financial service provider.
The bank will continue to push overseas strategies that provide comprehensive financial services to local businesses and business people centered around the Asian region for the sake of the Korean economy's reaching advanced stages and the common prosperity of Asian countries with the ultimate aim of the bank becoming a global bank leading Asian finance.
The bank will exert its efforts to provide stable and continuous loans to Korean enterprises advancing into Asian countries and local companies to let them create employment added values in countries they are located and thus create demand enough to enable co-existence of all of those countries in Asia. The bank will employ various strategies to supply needed direct and indirect financial services to companies and individuals in those countries for a common prosperity of all Asian countries.
Kookmin will try to increase its non-banking portfolio and overseas advancement to find new growth engines to offset a dim outlook for sustained growth in net interest margin in the H2. The bank will also try to boost the competitiveness of its low-interest deposits under its strategy to expand the business areas where profit margins are high such as loans on credit to individual borrowers. The bank will also work hard to strengthen its sale network for such non-banking products as bancassurance and funds to increase non-interest income.
In order to slow the movement of low-interest deposit funds moving to CMAs managed by securities firms, the bank will expand value-added services available at banks to heighten their competitive points. Kookmin will also focus on niche markets with "KB s-ERP"and try to induce deposits by expanding value-added services associated with bank transactions. Kookmin will try to create financial products which are based on older customers'needs and interests such as "Wine Regular Deposit" and competitive and put them on the market. The bank will train its employees to strengthen their abilities to handle fee-income products such as bancassurance and investment funds designed to boost fee income for the bank. The move is geared to make up for the loss of interest income from the boosts in interest rates that reduced mortgage loans and SME loans. nw

President & CEO Kang Chung-won of Kookmin Bank.