“Indonesia is the only country where IBK does not have a branch among countries that more than 1,000 South Korean companies have made inroads. Since it is impossible to establish a local subsidiary in Indonesia, an M&A with a local bank is the only way to enter the market,” Kim Do-jin, CEO of the IBK, said at a news conference in Seoul. It was his first since he took office in late December.
|Kim Do-jin, CEO of the Industrial Bank of Korea, speaks at a press conference in Seoul, Thursday. (IBK)|
“I cannot give out names publicly but we have selected a strategic partner to pick a target bank, a legal partner and an accounting firm for due diligence. I hope a detailed picture will be drawn up within this year and hope to conclude the deal next year.”
The state-run lender, which focuses on corporate lending for small and medium-sized companies, originally had a branch in Indonesia but withdrew it in the wake of the 1997-1998 Asian financial crisis. Rising financial needs among Korean SMEs there have led the bank to seek to re-enter the market, Kim said.
The IBK will also push to expand in Vietnam and Cambodia, he said.
In Vietnam, the bank plans to add another branch to the existing branches in Ho Chi Minh and in Hanoi.
In Cambodia, it is waiting for the approval of the local authorities for a branch in Phnom Penh.
In the local market, the IBK will focus on financial support for vulnerable SMEs who have business difficulties due to a decreased number of Chinese travelers here in the wake of the recent Seoul-Beijing row over the deployment of the US’ Terminal High Altitude Area Defense anti-missile system on the Korean Peninsula.
“For those suffering losses from the THAAD issue and rising market interest rates sparked by the US interest rate hike, we will frontload 60 percent of our annual fund supply target in the first half,” he said.
The Ministry of Strategy and Finance has a 51.8 percent stake in the IBK and the rest is held by two state-run policy banks, Korea Development Bank and the Export-Import Bank of Korea.
Kim dismissed worries about the IBK’s exposure to the crisis-hit Daewoo Shipbuilding & Marine Engineering, saying it has only a “small” exposure to DSME’s subcontractors.
By Kim Yoon-mi (email@example.com)