KDB to Help Needy Firms

State-run bank to eye overseas to be corporate investment bank and help firms strapped for cash

Korea Development Bank is to provide enough funds to business firms starved for funds this year as they are having trouble due to the financial crisis sweeping the world whose intensity has never been so high in history so far, Gov. Min Euoo-sung said.
The governor also said KDB will be transformed to become a top corporate investment bank in the world by 2020. He made the statement on April 1, the state-run bank's 55th anniversary.
Min said the entire world is going through a global economic crisis at the same time for the first time in the history of the world and the situation calls for the state-run bank to play a key role in stabilizing the financial market.
The KDB top manager said the bank will provide enough funds to Korean business firms at the forefront of the bloody battle of competition in the world stage so that can not only survive the current economic crisis, but also lead the new business stage to be created after the crisis is over.
He said the bank will go over the restrictions on general corporate loan limits, but will work to stabilize the financial market relying on turn-around funds under a systematic approach to bring vigor into the market.
The governor said KDB will seek to provide a segregated financial service so that borrowers will be able to carry on with their operations in many areas successfully, in particular, in the area of finding new growth engines and restructuring economic structure through preemptive restructuring. KDB will focus on its loan provisions to SMEs, start-ups and green growth business firms, in particular, Min said, in such way that the bank's loan activities will stand out among banks.
The KDB governor in describing the bank's future as a private bank as soon as the draft law on its privatization is passed at the parliament, Min said the new law will free the bank from criticisms that its roles sometime created conflicts in the financial market, but the privatization is not the end of the bank's ultimate objectives.
The bank will reform its business structure and strengthen its operations to upgrade its competitiveness at the financial market, Min predicted.
The bank official stressed that strengthening the bank's competitive edge and its role to create a base for financial market stability at the same time may seem awkward, but it never is separate altogether. The bank has to have a sound profit base and operation to play a faithful role of safety pin in the financial market.
Min also emphasized a creative organizational culture at a bank. He said it takes courage and determination to find a new road, rather than an old familiar road. KDB should be a pioneering bank in overseas operations, instead of wasting its energy to compete in the domestic financial market .
Under a long-term strategic vision set by KDB and in line with the government's policy to transform Korea into a financial hub, it will broaden its business presence beyond the nation's borders. KDB will focus on its four core financial services--corporate banking, investment banking, international banking, corporate restructuring, and consulting--targeting customers both at home and abroad.
The expertise and experience accumulated over the past five decades will serve as a springboard for KDB to forge ahead in its operations. By remaining responsive to the ever-changing needs of its customers and offering quality, tailored financial solutions, KDB looks forward to seeing its list of international clients and business partners grow in the years ahead.
In addition to raising the competitiveness of its core businesses, KDB aims to align its business practices to meet the highest standards and elevate its financial status to that of leading global banks.
By 2011, KDB plans to strengthen its financial position by attaining a total equity of 15 trillion won, an ROE of 18 percent, and an NPL of less than 1 percent.
In the meantime, KDB will introduce a 100 billion won turnaround fund as early as in April 14, 2009, as more companies suffer from the shortage of funds due to the impact of a global financial crisis and sharp economic slump, the bank said recently. The buyout fund will acquire controlling sakes in distressed small and medium-sized enterprises, try to turn them around with help from a group of corporate restructuring and financial specialists over the next 2 to 3 years, and look to sell them at higher prices.
The fund to be launched officially toward the end of April, may be expanded to 1 trillion won within the year in order to rescue more companies, bank officials said. nw

Gov. Min Euoo-sung of Korea Development Bank.