KDB Considers Increasing Daewoo Securities Capital
By Na Jeong-ju
Staff Reporter
Korea Development Bank (KDB) Deputy Governor Kim Jong-bae said Thursday the bank is considering increasing capital of its brokerage unit, Daewoo Securities.
Kim also noted the KDB intends to change Daewoo's name, saying the change is necessary to improve its corporate identity.
``If the board of Daewoo wants to increase its capital, we are willing to make further investment into Daewoo,'' Kim told reporters in Seoul. KDB is the largest shareholder of Daewoo with a 39.09 percent stake.
Kim said the KDB doesn't have a plan yet to sell Daewoo.
``We haven't thought about selling Daewoo. Daewoo is very important for our plan to grow KDB into a strong global investment bank,'' Kim said.
Commenting on proposals from private lenders that KDB scrap its investment banking business, Kim said the country needs to nurture a state-owned investment bank, citing France's Calyon, Singapore's DBS Bank and Norway's Nordic Bank.
``There are so many state-run investment banks around the world. Whether we are owned by the government or not is not an important matter in our efforts to become an investment bank,'' Kim said.
Kim expressed discontent over those who are pressuring KDB into terminating its investment banking business, saying the bank has a stronger track record in the business than any other Korean banks and securities firms.
Under a government-initiated plan to restructure the functions of state-owned banks, which was unveiled on June 7, the KDB will transfer its investment banking business to the two of its subsidiaries _ Daewoo Securities and KDB Asset Management _ to create a financial investment company. In the face of criticism for its excessive investment in corporate restructuring, the bank has been urged to sell its investment banking arms, but it has said it will keep them.
``We are considering changing the name of Daewoo Securities for our corporate identity. Its new name can be KDB Daewoo Securities,'' Kim said.
Regarding the bank's plan to sell its stake in Daewoo Shipbuilding & Marine Engineering, Kim said the KDB plans to decide on the timing of the sale in the second half after the firm announces its first-half results. KDB has a 31.3 percent stake in the shipbuilder.
He said that the bank will consider allowing foreign investors to take part in bidding for Daewoo Shipbuilding on conditions that all legal hurdles limiting foreign investment in the shipbuilder are cleared in parliament.