New CEO at the IBK

Pres. Yun Yong-ro says the strategy to expand into securities and insurance businesses remain unchanged

Yun Yong-ro, the new president of the Industrial Bank of Korea, said the bank will continue to push its plan to expand into the insurance and securities businesses after reorganizing the bank as a holding company.
During a media conference following the announcement of his appointment as the new CEO, he said the IBK's plan to get into the securities and insurance sectors is part of the bank's strategy to provide all-around financial services to SMEs. Yun succeeds the late CEO Kang Kwon-sok, who died recently following a long illness.
The bank will set up a securities and insurance firm that exclusively provides support to small and medium firms, he said. Tentatively named "IBK Investment & Securities Co.,"it will start with an initial paid-in capital of 300 billion won with a special interest in handling securities papers and M&As in addition to buying and selling stocks. The bank wants to start the securities business in May or June when it files all the papers it needs to with the FSC.
The new securities firm plans to set up 15 branches in Korea within the first year of its operation. When the securities firm has a firm operational foundation, the bank will seek to take over an insurance firm as a step toward becoming an integrated financial company, engaged in all aspects of financial businesses.
On the privatization of the IBK, he said he will consult with the government to determine the portion of stakes to be sold to the public. In the meantime, the bank will prepare for the day when it will be a nationwide commercial bank through a gradual change in its setup and operation.
The new IBK CEO said he is overwhelmed by the challenge to succeed his predecessor who had done such a wonderful job in expanding the bank's scale and income.
He said he will draw up a new map for the IBK's strategies, but he felt the banking environment has been growing worse and overseas conditions are not expected to improve in 2008.
"Like any other state-run bank, the IBK's main role is to provide umbrellas to its customers when it rains. We plan to search for SMEs with very good outlooks for growth and provide them with financial support as part of the government's plan to grow the national economy,"Yun said.
"The small and medium companies can be compared to columns that support the national economy and the time is fast approaching for the IBK to play its role to the hilt as the professional financial organization set up to help those firms."Yun said the IBK will set up a new securities firm designed to provide comprehensive financial services ranging from setting up new firms and lending operational funds, to public listings and the issuance of bonds, just like a comprehensive financial company would.
The new top IBK official said the bank needs an insurance firm for employees of SMEs and the bank will look for an insurance firm to take over. But at the same time, he added, it will also study a plan to set up a new insurance firm depending upon the government policies under the new Capital Market Consolidation Act to be in force from next year.
The IBK president also said he will strengthen the bank's deposit-taking and retail banking sectors to help SME's meet their financial needs. On the privatization of the IBK, he said, the bank is already like a private commercial bank in terms of operation. Government stakes will be sold off gradually, depending on government policies.
He said that maintaining a balance is important in running the bank when asked which aspect he will stress more: profitability or the public nature of the bank as a state-owned bank.
Yun, a veteran public servant, was vice chairman of the Financial Supervisory Commission when he was named to head the IBK in December last year.
Yun envisions the future of the bank as a professional integrated bank exclusively for SMEs, taking advantage of its accumulated experience in lending to SMEs through its network and know-how, which is not accessible to the commercial banks in the country. He would like to firmly establish the IBK's capacity far above that of any other commercial banks in Korea.
For the IBK and its employees, 2007 was a sad year with CEO Kang dying in November after his diligent efforts following his reappointment to the post in March. The late president succeeded in both expanding the bank's assets and profits enormously.
But Yun has brought a change to the atmosphere at the bank by holding out a vision to create a new working environment for its officers and staff. nw

President Yun Yong-ro of Industrial Bank of Korea.