Kookmin looks beyond domestic market

The global financial crisis last year hardly dented Kookmin Bank`s leadership in the local consumer banking market. Now the bank is readying for another leap forward, this time toward becoming a leading bank in Asia.

Since its establishment in 2001, the bank has used its vast customer base and branch network to become the leader in assets.

CEO Kang Chung-won stresses that the bank must not be complacent. It has to transform itself into a fast-moving and flexible organization in order to grab opportunities in fast-evolving Asia, he says.

"It is not `big beats small,` but `quick beats small.` Now is time that we must pull our resources together to make a big, but quick and flexible bank," Kang said earlier this month as the bank celebrated its eighth anniversary.

Kookmin`s competitiveness in the local market will be leveraged in overseas expansion efforts, bank officials said.



The lender has pushed to build a strong presence in emerging countries in the region since 2007, hoping to cater to a burgeoning rank of Asian high net worth individuals and corporate clients.

The lender aims to establish what they call the KB Triangle Network, which links China, Southeast Asia and Central Asia.

As part of its overseas expansion drive, the bank raised its equity stake in Kazakhstan`s Bank Center Credit to 40.1 percent from 30.5 percent in September. Kookmin also acquired Khmer Union Bank in Cambodia for $7.63 million and changed its name to Kookmin Bank Cambodia.

KB Financial Group, which was established last year as the holding company for Kookmin, aims to join the top 10 financial groups in Asia by 2013.

"We have made great success in our group-wide efforts to create synergies among subsidiaries through joint marketing. Kookmin Bank, as a leader in the group, should step up efforts to strengthen cooperation," Kang said.

"Also, we must make utmost effort to deliver best products and services at lower costs," he said.

KB Financial comprised of nine subsidiaries -- Kookmin Bank, KB Life Insurance, KB Real Estate Trust, KB Investment, KB Credit Information, KB Data System, KB Asset Management, KB Futures and KB Investment & Securities. Currently, KB earns around 96 percent of its revenue from the banking sector.

Today`s Kookmin Bank was launched on Nov. 1, 2001, as a result of a merger between the Housing & Commercial Bank and Kookmin, which was set up in 1963.

Total assets at Kookmin grew from 156.8 trillion won back then to 266.2 trillion won. Along the way, Kookmin set a milestone in the local banking industry in 2005 when it surpassed the annual net income of 2 trillion won which no other banks had come even close to until then. It posted net profits over 2 trillion for three years from 2005.

Kookmin`s asset soundness also improved greatly over the eight years, due to strict risk management practices.

Overdue loans accounted 0.8 percent of total lending at the end of September, from 2.51 percent in 2001. The ratio of non-performing loans came down from 3.56 percent to 1.41 percent during the period.

Last week, H.K.-based magazine Asia Risk picked Kookmin as the House of the Year for Korea, recognizing its efforts on risk management during a global financial turmoil last year. Kookmin won the prize for two years in a row.

Kookmin Bank is the only bank in Korea that three major international credit appraisers gave ratings that are parallel to the county`s sovereign one. Standard & Poor`s keeps Kookmin`s rating at "A," the same rating given to the Korean government`s rating, while Moody`s Investors Service gives an "A2" and Fitch Ratings an A+.

The bank also received top honors in major local customer satisfaction surveys, including the National Customer Satisfaction Index and the Korean Customer Satisfaction Index.

Earlier this month, it became the first bank in Korea to receive accreditation for ISO 27001 on overall IT services.

(milaya@heraldm.com)





By Lee Sun-young