Korea Exchange Bank (KEB) has been providing financial support to SMEs with excellent technologies but without financial means to keep themselves going, expecting those firms will be at the center of Creative Finance in the future.
KEB launched the SME Support Department in July last year followed by the Creative Finance Center in October, which became an independent unit within the bank from February to expand its roles and operation.
The center’s main job is to evaluate the technologies owned by SMEs and provide loans based on the evaluation results of their technologies. The loans will go to further commercialize the technologies. The center will give loans to SMEs even if they don’t have enough collateral so long as their technologies have enough viability and their business outlook is good.
The center also provides consultations on finance to its SME customers with financial problems and consultations on exploring overseas markets at the Global Consultation Center, which provides diverse financial support and services.
The center conducted a tour to explain technology finance and risk control to SMEs around the country in cooperation with the Small and Medium Business Association and the Small Business Administration. KEB also provided support to seminars and forums conducted by the Small and Medium Business Association and the Small and Medium Business Support Expo conducted by the government.
Through such financial support and events, KEB’s loans to SMEs increased substantially, standing at 17.8 trillion won at the end of last year, rising from 17.1 trillion won at the end of June. The bank’s technology finance rose to 145 billion won in October from 3 billion won in July. It was the first time it broke the 10 billion won level to end the year with 691 billion won.
KEB officials said the bank has been offering lower interest rates to those SME borrowers with more valuable technologies.
The bank will strengthen its fintech finance and is ready to compete in the global payment settlement market.
Korea Exchange Bank (President & CEO Kim Han-jo / www.keb.co.kr) announced on Nov. 6 that Standard & Poor’s, a world-renowned credit rating agency, revised KEB’s short- and long-term credit rating upward and reported the Bank’s long-term outlook as “stable.”
As of Nov. 5, the Bank’s short-and long-term credit ratings were “A-1” and “A,” respectively, placing the Bank in the same ratings group as Shinhan Bank, Kookmin Bank, as well as Hana Bank, another member of Hana Financial Group.
S&P cited the following as reasons for the upward revision: the bank’s strategic importance within the group will grow enough for it to play vital roles in the group’s long-term direction; the bank’s competitive edge in foreign exchange and global trade finance can contribute to diversifying the group’s business; and the coming merger with Hana Bank will help KEB broaden its position within the domestic financial system.
A KEB officer said, “Standard & Poor’s revision comes after Fitch’s upward revision of our rating, from F2 to F1, on July 31, implying that the global market recognizes KEB’s commitment to creating synergies within Hana Financial Group and that the Bank is among Korea’s best.”
Alongside the credit rating increase, KEB’s subordinated bonds maturing on Oct. 24, 2023 (par value: $200 million, Coupon rate: 4.625 percent) were raised from “BBB+” to “A-“ and those maturing on Oct. 14, 2024 (par value: $300 million, Coupon rate: 4.625 percent) were raised from “BBB-” to “BBB.”
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