Kookmin Bank Right on Track

Bank continues to pursue overseas expansion under Pres. Kang’s unshakable leadership

President Kang Chung-won of Kookmin Bank this year has become the first CEO from the financial community to win the Best Manager Award from the Korea Management Association.
The hard-working CEO deserves the award as his achievements at Kookmin Bank show so far this year. He has done a truly remarkable job in leading the bank in overseas operations in particular.
His plan to strengthen the bank’s overseas operations is focused especially on Southeast Asia, China and the Commonwealth of Independent States and has been showing very good results already.
In 2008, Kang directed the takeover of a local bank in Kazakhstan and has successfully acquired a stake in a local bank in Phnom Penh, Cambodia, for $7.63 million and renamed it Kookmin Bank Cambodia as an overseas affiliate based on the bank’s strategy to restart its stalled overseas M&A operations.
He managed to expand Kookmin’s stake in Kazakhstan Bank Center Credit to 30.5 percent, showing the extent the bank benefitted from the takeover, along with CEO Kang’s foresight in overseas M&As in terms of gains for Kookmin Bank.
Officials at the bank said they can no longer depend on domestic operations to expand profits with economic conditions remaining sluggish, and they have to look outside the country for businesses as the world economy begins to resurge to the extent that the bank can set up overseas branches and representative offices to pave the way for the expansion of its operations.
Kang’s achievements are not limited to overseas operations. His bold moves in other areas of the bank’s operations have also been nothing short of brilliant. While the entire financial community was at a standstill, caught up in the global financial crisis, he successfully managed to issue a covered bond on the bank’s credit alone, without a government guarantee at that. The move was like a coup in the financial community as it occurred after bond investors disappeared due to the financial crisis ignited by the Lehman Brothers fiasco in September 2008, and it brought with it the positive signal to the banking community in Korea that they can borrow from overseas.
Kookmin Bank’s successful move was not only the first for a domestic bank in Korea, but also in the Asia-Pacific region. Kookmin became only the eighth bank in the world to have issued covered bonds successfully on its own credit strength, joining such global financial institutions as JP Morgan, HSBC, Goldman Sachs, Credit Suisse, Labo Bank, BBVA and Standard Chartered.
Kang’s bold move surprised everyone both inside and outside the bank. His key move was to successfully persuade the financial authorities to approve the bond issuance plan within the boundary of the Asset Movement Law.
In the meantime, Kookmin Bank gained a further advantage in its efforts to expand the operation overseas, especially in Southeast Asia. Cambodian Prime Minister Hun Sen visited the bank’s IT Center in Yeouido, Seoul, on June 3 during a leg of his itinerary to attend the Korea-ASEAN meeting commemorating the alliance between Korea and ASEAN held on Jeju Island. The bank felt that the top Cambodian leader’s visit to the center emboldened its strategy to export its IT network technology as Hun Sen was the first head of state ever to visit the center, although many heads of banks from Southeast Asia have also toured the facility to learn about the application of IT technologies to the operation of banking facilities.
The top Cambodian government official toured the truly magnificent IT applied-banking facilities connecting the bank’s 1,121 domestic branches and other banking outlets around the country, 9,600 automatic teller machines, Internet banking, the operation of credit cards through the IT network and a high-tech monitoring system running 24 hours a day.
Kookmin Bank took a 51 percent stake in a Cambodian bank in Phnom Penh that caters to Korean businesses operating in the Southeast Asian country and local customers.
The bank has Southeast Asian operations in Cambodia, Vietnam and Indonesia with top-level IT facilities and banking know-how and provides advanced financial services boosting Korea’s prestige as a strong IT country. nw

President Kang Chung-won of Kookmin Bank.

The headquarters building of Kookmin Bank in Yeouido, Seoul.