Chairman Hong Ky-ttack of KDB Financial Group said in his New Year’s speech that KDB has been given back its role to act as a state financial group, a window of government policy loans, as it did last year in order to contribute to the development of the national economy and the financial industry.
Last year, KDB supplied 47 trillion won in funds, expanding its operational assets by 8 trillion won, implementing over 6,000 financial deals including technology financing such as intellectual property (IP) banking, resulting in outstanding operational achievements.
But KDB had to finish last year in the red for the first time in 13 years due to losses incurred while doing its duty as the safety pin of the financial market, including taking care of the STX Group’s financial mess.
The major objective of KDB for this year is to further strengthen its given role as a policy loan bank, setting up a model and still making a profit to boost its image as a policy loan financial entity. KDB should positively support the Creative Economy by expanding its loans to SMEs, venture firms, and others with great potential for success.
“We have to boost our capacity for technology evaluation to develop new financial products in the area of IP finance and expand the infrastructure to back them up to lead the support of Creative Finance,” Chairman Hong said.
“We have to deals with M&As and buy-out funds to spur the recovery of investment fund mechanisms in order to strengthen the ecology of the Creative Economy, going from start-ups to growth and finally recovery of funds.
“We also have to perk up our drive to penetrate overseas financial markets in order to solidify our country’s economic growth base. KDB should provide investment opportunities and chances to sign cooperative ties between domestic firms and foreign companies with great potential for growth so that domestic firms can obtain the necessary technologies from them to create new markets,” the chairman continued.
“To regions such as Southeast Asia and the Middle East, KDB should help Korean firms with great interest to set up their businesses in order to form partnerships among them to enter those regions.
“KDB should also seek investment targets in such regions as Africa with great potential for development and lead the Korean firms to enter the region to cut a dominant slice of the markets,” Hong said.
Hong also warned of big changes in the domestic financial market as a result of the United States tapering its quantitative easing measures, and KDB should play a leading role in normalizing the bond market and suggest means to solve the problems of the companies affected by the tapering to minimize the impact on the domestic market.
“We should also take advantage of our skills for M&As, PE, and financial consultation, and other financial know-how to render advice in such matters as restructuring and other new financial undertakings,” Hong said.
“We ought to be more alert to risk management to rebuild a positive earnings structure, learning from what happened to STX Group, its risk management problems in particular.
“KDB Group should tighten its watch on its affiliates by launching a check-up system to strengthen risk management and work on boosting the financial stability by diversifying its business portfolio.
“KDB should have a common check-up system for all of its invested companies to upgrade their competitive power and corporate values, which will also boost KDB’s image. KDB should also work on its internal reforms, eliminating unnecessary expenses and retaining only the profitable businesses,” the chairman said.
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