SEOUL, KOREA - The Industrial Bank of Korea (IBK) will strive to become a stronger bank by strengthening its substantial management, Kwon Seon-joo, CEO of the state-run lender said.
In an interview with Korea IT Times, Kwon, who became the first female chief of a bank in Korea in December last year, said, "IBK will actively push for internal growth this year by cementing growth, soundness,and profitability, while fulfilling its social responsibility.
"In the past, IBK enjoyed high growth while successfully tiding over the global financial crisis. Now the bank will focus on strengthening the basic role of the bank and strike a balance between profit-making, financial health,and social responsibility."
Noting that only banks with strong fundamentals will succeed at this time when fast economic growth is unforeseeable, she said that IBK will avoid quantity growth that does not yield profits, while focusing on businesses that can make IBK fundamentally strong. Although it will take time,she added that avoiding expansion does not necessarily mean avoiding new growth engines.
"We will thoroughly review all our banking sectors to find any inefficiencies in branch operations, personnel management, and expenditures. Then we will be able to resolve any problems we find," she said.
CEO Kwon mentioned that the top three management guidelines for the year 2014 will include more emphasis on quality as opposed to quantity, responsible management,and communication.
"Along with this, IBK will push for a clean bank for the establishment of financial consumer protection by improving irrational business practices," she said.
In line with this, IBK chose developing lifetime customers, creative support for small and medium-sized enterprises(SMEs), a management of soundness,and the protection of customer information as its 2014 major business strategies.
"First of all, we will prepare for a foundation of inner growth by making our current 14 million customers IBK customers for life. To achieve this goal, we will implement scientific and detailed business strategies to provide IBK customers with suitable financial products and services at a proper time,' said Kwon.
Supports for small and medium-sized enterprises
Asked about the bank's detailed plan to strengthen the competitiveness of SMEs, CEO Kwon said, "We will concentrate on efforts to help SMEs expand new growth engines, while extending financial support continuously. For instance, IBK will extend 40 trillion won in loans to SMEs in 2014, up 2 trillion won from the previous year."
Commenting that the financial paradigm for SMEs is changing from the past lending, mortgage,and fund assistance model to one of investment, technology & growth support,and cultivating, she said, "IBK plans to systemize its support for creative financing by expanding organization exclusively for finding SMEs with advanced technology, strengthening technology appraisal ability, activating intelligence property (IP) financing,and fostering the cultural contents industry.
"Along with this, IBK will bolster its programs to foster SMEs, including management consulting services, and create an ecosystem in which creative SMEs can grow and develop further," said Kwon.
Overseas advancement plan
Through its 22 overseas offshoots and memorandum of understandings (MOUs) with world-famous banks around the world, IBK is also offering financial services to Korean SMEs operating overseas.
"We plan to speed up advancement into emerging markets in Asia with more local-oriented operations. For an example, IBK will build a total of 15 business networks in China with the opening of the Beijing branch in February this year," said Kwon.
In India, the world's second largest country in population, IBK is also planning to upgrade its representative office to a branch as a growing number of Korean manufacturers are advancing into the country.
"IBK is seriously considering making equity investment in a local bank after establishing a representative office in Indonesia in which 1,255 Korean companies now do business, the third largest figure following those in China and Vietnam," said the female CEO.
"In addition, IBK is pushing for opening of a representative office in Cambodia in which a number of Korean textile makers have made inroads. For those in foreign countries where IBK cannot immediately open a branch, the bank will extend financial supports through its some 68,000 global networks of 14 banks with which IBK has signed an MOU," she explained.
First female bank CEO in Korea
When asked how she felt becoming the first female bank head in Korea, Kwon said, "My nomination may reflect the trend of the time as more women take on major roles in society. I’m glad that I can give them inspiration, but I also shoulder a heavy responsibility to set a good example.”
"To enhance Korea's competitiveness, the women's participation rate in economic activities should go up and the nation should use moreof theexcellent talentsof women," she stressed.
Noting that she was able to obtain traditional male-dominated jobs through preparation, Kwon said, “I studied businesses such as those involved in foreign exchange and credit loans to advance through the Korea Banking Institute’s cyber study programs. Then I asked seniors to show me more responsibility in these fields, showing them I was prepared. My requests were sometimes rejected, but they finally recognized my determination.”
She also advised junior female workers to actively get effective help from the people surrounding when you need to tide over various difficulties and to keep a balance between both home and work.”
Be prepared to cope witharapidly changing financial environment
"Speaking frankly, although the financial environment is changing at a rapid pace, the financial practices of Korean banks and bankers' mindset have remained in the past, ," she said.
Stressing that the financial environment in Korea is facing a great change in terms of both economic structure and population structure, CEO Kwon said, "Korea's low-growth structure has entered a maturity stage after passing through a high-growth era, and the nation's population structure is rapidly becoming elderly. The focus of the nation's financial policy is also moving from developing the financial industry to protecting financial consumers.
"Accordingly, we should aggressively challenge and cope with giant changes through creative financing. For instance, banks should expand corporate financing through the appraisals of technology and intellectual property rights, beyond the past deposit & lending paradigm and mortgage-oriented financial supports.”
She added, "At the same time, banks need to continuously develop new financial products for the aged in our society and diversify profit structure, which is now excessively centered on interest profits,in order to secure global competitiveness."
