By Kim Tae-gyu
ALMATY, Kazakhstan ― Early this year, the Bank of CenterCredit (BCC) in Kazakhstan was regarded as an ugly duckling due to its huge losses from the perspective of its owner, Korea’s Kookmin Bank.
Yet, BCC shows signs of turning into a beautiful swan after recording profits during the first half of this year. For the full 2011, the Almaty-based lender is also expected to remain in positive territory.
The dramatic transformation from a money loser to a potential cash cow was carried out under the stewardship of Suh Ki-youl, who took charge of operating BCC in late 2010.
``During the first 10 months of this year, we remained in the black. For all of 2011, we expect to chalk up profits,’’ BCC Standing Director Suh said in a recent interview with The Korea Times.
Kookmin invested around $1 billion to purchase a 41.9 percent stake in BCC in the late 2000s, a decision made before the international financial crisis hit the global economy including that of Kazakhstan.
Kookmin had to book hundreds of millions of dollars in write-offs associated with its purchase of the stake, but netted a deficit of $198 million in 2010, which prodded the Seoul-based lender to think of selling it off.
In contrast, BCC racked up $8 million in net profits during the January-June period of this year.
Asked about the secret of the abrupt turnaround under his leadership, Suh said that the top priority was given to financial
management and the improvement of loan quality by optimizing funding structures and mopping up excess liquidity as well as reducing the share of low-income assets.
``In order to enhance the asset quality, we have changed our system by separating the credit review function from marketing, by which we can strengthen credit monitoring more effectively than before,’’ Suh said.
``The staff delegated by Kookmin have done their best to improve loan recoveries efficiently. In the meantime, for cost saving purposes, we have restructured 35 business units as well as consolidated back-office operations. These efforts resulted in increased interest and non-interest earnings.’’
Suh expects that BCC will be able to become a genuine leader in the Central Asian country.
``Since the Kazakhstan system and financial environment differ from those of Korea, it’s not easy to set a detailed goal,’’ said Suh, who joined Kookmin Bank in 1981.
``But, based on the three years of experience participating in BCC’s management, with strong support from Kookmin Bank, BCC will truly have the potential to be No.1 in Kazakhstan within three to five years from now with regards to asset quality, growth potential, net profit, customer satisfaction and transparency.’’
While reiterating Kookmin’s commitment to BCC, the 57-year-old Kookmin lifer said that his team will duplicate the success of the
parent bank.
``Nowadays, the level of job performance is being improved in terms of quality due to Kookmin Bank specialists in various fields. In the future, having a service mindset shaped by employees we can really make one more Kookmin in Kazakhstan,’’ Suh said.