KDB to Strengthen Overseas Operations

Plans M&As of Asian financial firms, sale of Korea Express and 30 new bank branches

Chairman Min Euoo-sung of the
KDB Financial Group and president
of the Korea Development Bank

Chairman Min Euoo-sung of the KDB Financial Group and president of the Korea Development Bank, said the group will sell off Korea Express Co. in the first half of this year.
During an interview with a local daily, the KDB head said the bank will introduce a regular savings account that pays one percent more than similar savings accounts at commercial banks and open 30 new branches across the country.
Min said major stakeholders in the trucking company are Asiana Airlines and Daewoo Construction and KDB will hold consultations with creditors and discuss and agree on the best way to sell the transport company as soon as possible. He said a manager will soon be selected, as Asiana Airlines and Daewoo Construction each hold 23.95 percent of the trucking company shares and it would give the buyer management control of Korea Express as a premium.
Chairman Min said the sale of Korea Express would help improve Asiana Airlines' financial conditions because the airline issued 450,000 billion won worth of exchangeable bonds when the Kumho-Asiana Group took over the transport company, and the bonds can be repaid when the trucking company is sold. Min said Asiana would get a big boost in its competition with Korean Air when its debt burden is reduced and it can expand its air routes.
KDB will focus on expanding deposits by issuing deposit account that pay 1 percent higher interest rate than those being paid by commercial banks and open 30 more new branches this year, in addition to the 20 opened last year to key on expanding deposits.
In addition, the bank would use KDB Life's and Daewoo Securities' branch offices to attract more deposits to KDB, along with strengthening KDB's internet and smart phone banking, Min said. He also said KDB will issue high-income securities notes this month, which are similar to regular deposit accounts at commercial banks, with KDB's long-term project financing as mortgages against the securities notes. He expects the securities notes to be very popular among investors as it is backed up by KDB and pays more interest rates and the expanded funds at KDB will also help its privatization.
KDB, in the meantime, plans to take over from two to three Asian banks, stepping up its overseas operations based on the projection that Asia will have a financing need for $800 billion in infrastructure construction annually. KDB will shoot for sharing 10 percent of the financing need amounting to $80 billion.
Min said KDB will conduct M&As with two or three financial firms in Asian countries in which it currently has no presence. KDB currently has subsidiaries or branches in such Asian countries as China, Japan, Singapore, Hong Kong, Uzbekistan, and others and has its liaison staff stationed in such Asian countries as India, Vietnam, Indonesia and the United Arab Emirates.
The chairman said KDB has only eight times the leverage ratio and can compete with foreign financial firms with as high as 20 times the leverage ratio and therefore can afford to have more active business strategies than others. KDB will go for expanding the strength of its global operations in order to be ready for the upcoming privatization, Min said.

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