Kookmin Expansion
into Securities on Track

Pres. Kang announces path for 2008, including a holding company in Q3

President Kang Chung-won of Kookmin Bank announced new growth strategies and changes in the way the bank operates in an effort to make it the busiest bank in the country this year.
Kang has set out to do something remarkable for the bank, following his reappointment as CEO on Oct. 31 last year. During his first three-year term, he focused on putting the bank on a stable growth path, boosting both the soundness and profitability of the bank. During his second term, he will try to make the bank a top bank in Asia, far above the number two bank in the country.
Kookmin Bank, the nation's largest retail bank, will launch the sale of securities at its branches across the country in either April or May and set up a holding company in September, bank officials said.
They said a large personnel shake-up will also take place early in the year, along with more than half of the registered directors whose terms expire in March, making this the year with the largest personnel changes in the bank's recent history.
The bank will trim the excess staff at its head office and reassign them to business offices. The exact number of the staff to be reassigned has yet to be revealed.
Also in the cards is the decision on eight vice presidents, including those who came from outside the bank who are up for replacement, they said.
During the shareholders'meeting in March, Chairman of the Board Chung Dong-soo, Group Vice President Shin Hyun-gap, auditor Chang Hyung-dok and one outside director will either be retained or replaced.
The bank is also scheduled to launch the KB Securities Co. in the second quarter and begin retail sales of securities for Hanuri Investment & Securities after increasing its marketing personnel in either April or May. The bank acquired the securities firm in December last year by taking over 95.8 percent of the stake for 266.3 billion won. The transaction is being screened by the Financial Supervisory Service.
The bank is also considering setting up 'financial plazas'in locations where the bank and Hanuri Investment & Securities operate branches to handle both financial and securities products. The bank plans to expand into the investment banking business and Hanuri will be a key element in the bank's strategy to build up its IB sector.
By the end of August, the bank will set up a financial holding company and launch it by the end of September after selecting executives and staff, the bank officials said.
At the Kookmin Bank Holding Company Establishment Committee meeting, committee chairman Chung Ki-young, a professor with Keymyung University, who is an outside director of the bank, said the target is to set up the company as early as possible. But, he added, many things have to be considered and ironed out, which is why the launch date was pushed back to the end of September.
The bank has to apply for a preliminary approval from the Financial Supervisory Commission followed by official approval later as well as shareholders'approval, which should pose no difficulties.
But the launch date was set for the end of September because the bank has to obtain approval from the Securities and Exchange Commission since it is listed on the New York Stock Exchange, which is likely to happen toward the end of September.
Chung also said such delicate matters as who will head the holding company's should it be the Kookmin Bank President simultaneously heading the holding company or someone else's should also be decided before the inauguration of the company. He said he will listen to any opinions related to the matter before making a decision.
In the meantime, the bank plans to set up an affiliate to take on the credit loan business. The new affiliate will make loans to clients at rates higher than those offered by the general credit loan operators because most of the clients don't have mortgages or good credit backgrounds.
President Kang said the bank is ready to enter the non-life insurance business within the next three years, following the successful operation of its securities and credit loan companies. His long-term aim to acquire the Korea Exchange Bank has not changed, although Hong Kong Shanghai Bank has now become a priority bidder and filed the application to the FSC for approval to acquire the KEB. nw

President Kang Chung-won of Kookmin Bank.