President Kim Do-jin of Industreial Bank of Korea, 5th R, leads both IBK oficials and local financial officials at a ceremony to launch the IBK Indonesia Bankin Jakarta, Indonesia. (Photo: IBK)

Industrial Bank of Korea (IBK) has been hard at work to expand its operation in Southeast Asia to build an Asian financial belt, possibly before the official term of President Kim Do-jin is up.

IBK will launch its corporate body in September, as it has received approval from Indonesian financial authorities to merge two Indonesian banks it took over in January, IBK said.

The state-run lender said in a statement that the Indonesian authorities gave the green light to unite the two lenders - Agris and Mitraniaga Bank - into one new entity.

The approval came eight months since authorities issued approval in January for IBK to acquire the two banks.

Through the merger, IBK plans to launch IBK Indonesia Bank next month, which will go down as the first merger of foreign banks overseas in IBK’s history. The bank is set to financially assist not only Korean businesses there, but also local Indonesian businesses.

IBK’s plan is to increase the number of branches there from 30 to 55 by 2023.

This is in line with IBK’s vision to expand its presence in the fast-growing region of Southeast Asia.

“Indonesia is a key partner of the government's renewed policy focus on Southeast Asia, and around 2,000 Korean firms have a presence there,” an IBK official said.

“We will also push forward with plans to establish a subsidiary in Vietnam and enter Myanmar, to compete the IBK Asia Financial Belt and assist Korean SMEs’ entry into foreign markets.”

President Kim called for IBK’s Asian financial belt when he took office back in 2017 and has been working hard to accomplish the task.

The bank has outlets so far in such Asian countries as India, Myanmar, Vietnam, Cambodia and the Philippines. He pledged to visit every one of those outlets to check their operations as part of his work plan to build the bank’s Asian financial belt before his term expires next year.

The bank plans to localize its outlets in Ho Chi Minh City and Hanoi, Vietnam as soon as its application for the move to the Vietnamese Central Bank is approved.

The bank also plans to upgrade its rep. office in Myanmar to a branch as soon as the country’s financial market is open to foreign financial institutions.

The bank will continue take up the Global Companion Financing Program for its overseas operation as it has been doing in its domestic operations, meaning that the bank will be a companion to the Korean firms set to globalize their operations in a country they are trying to set up their operations giving them needed financing and non-financing services.

The bank will try to rebuild its overseas electronic system to operate the mobile information exchange service.

Getting a license to merge the local financial institutions it acquired from Indonesian financial authorities is a sign that the local authorities recognize that the bank can do well in Indonesia.

The bank will complete the work on building an Asian financial belt when it wins the permit to turn its branch into local subsidiary in Vietnam, and also successfully enters Myanmar so that it will be able to provide support to the SMEs to globalize their operation successfully.

IBK is expanding into the global markets, with a special focus on Asia to provide Korean SMEs operating in the global markets with local financing services. We are also expanding business partnerships with related institutions to find new, promising companies.

“We are striving to increase operating profit and deliver higher customer benefit by expanding the retail client base. While working to improve the asset quality of household loans, we contribute to customers’ wealth management through post-retirement life planning. The Bank provides a variety of products that reflect the changing market conditions,” the bank said.

“We offer specified money trust products through properly trained staff. As a policy bank, IBK is achieving high customer satisfaction and trust in the retirement pension market.” In the bancassurance business, IBK is offering the complete process from marketing tailored to changing government policies, to attracting new customers and to finalizing contracts.

 
“We also sell hybrid and bond-oriented mutual funds. IBK has created a ‘virtuous cycle in the credit card business’ where the increase of new cardholders leads to higher card usage and profit growth. We work to maximize profits by attracting more customers, expanding subscription channels, reorganizing high-cost products, and thoroughly managing expenses,” the bank explained.