Chairman Lee Dong-geol of Korea Development Bank (KDB). (Photo:KDB)

Korea Development Bank (KDB) has taken up an experiment to turn itself into an advance base for the 4th Industrial Revolution. How? It plans to funnel some 14.5 trillion won in loans and investments to business firms related to the new age that the success of the revolution would bring.

Chairman Lee Dong-geol led the bank in coming up with 10 trillion won to help the revolution during his initial year as the CEO of the state-owned bank in 2017. And in his second year, the bank doubled its funds for the initiative.

“Now that KDB has successfully accomplished its main role as the savior of business firms deep in financial trouble, it’s time that the bank accepted its role to provide funds to the growth of new industries by giving financial support to business firms with new technologies so they can grow.”

Chairman Lee often remarked that the good times for the Korean economy have come to an end with the Korean growth model catching up with advanced nations. “Our political role and the ability to solve the problems has faded to the extent public trust no longer on its side.” he said.

Lee led the work by restructuring such famous firms as GM Korea, STX Shipbuilding, Kumho Tire and Daewoo Construction since his arrival at KDB in September, 2017, putting off the KDB taking up its role as an investment bank, that is, until the end of last year.

The bank finally got ready to take up its IB operation with a personnel shakeup to assign the right officials to take charge of the new role at the end of last year.

Lee reorganized the bank’s setup by boosting the Reformed Growth Financial Headquarters to the Reformed Growth Financial Sector, naming the vice president to take charge up from the director while boosting the number of personnel in the sector to 90 from 70. The budget allocated to the sector amounted to 14.5 trillion won this year nearly doubled from the preceding year to be provided to venture firms and startups with new technologies in either loans or investments.

The bank will also step up its role to match investors with the firms that need investments. The bank has been holding the Next Start Round every week since August 2016 for investors and firms in need of investors, with additional staff assigned to the unit.

As of the end of last year, a total of 129 firms attended the event, getting some 708.4 billion won in new investments.

There, however, is a concern that the restructuring side of the bank’s operation could have been weakened while the IB side has been strengthened in the reorganization with the unit in charge elevated to the sector, from the headquarters, although the number of personnel has not been reduced. But many feel that the restructuring is no longer on the priority list of the bank.

The bank might assign the restructuring of non-financial firms to one of its affiliates and experts to take charge of restructuring at the assigned affiliate will be hired.

But many inside the bank feel that retired executives might be rehired to handle the restructuring of its affiliates, although the job is tough one with so many parties concerned with the restructuring including investors, business owners and labor unions and some party would take the blame in case of failure.

IB sources feel that experts for restructuring could be hard to find even if 300 million won, the same annual salary that Chairman Lee is paid, is offered. KDB might be criticized for delegating the job of restructuring to its affiliates just to share the blame for failure.