KEB to Strengthen Global Business
By Kim Jae-kyoung
Staff Reporter
Korea Exchange Bank (KEB) CEO Larry Klane said Wednesday that the lender will move to strengthen its global business over the long-term by creating synergy among business units and finding a new growth engine.
In the short-term, he said that the bank will place priority on improving asset quality and enhancing profitability.
At a press conference held in Seoul, Klane said, ``In the second half, we will focus on preemptive credit risk management to ride out the financial turmoil and improve our net interest margin (NIM) to enhance profitability.''
``In the long run, we will seek to enhance international competitiveness and long-term profitability by strengthening our overseas business, capitalizing on our large international network and expertise in foreign exchange,'' he added.
In July, as part of its globalization move, the bank launched KEB Asia Finance in Hong Kong to bolster its investment banking operations on the international financial market.
The bank also received preliminary approval from the Chinese financial regulator to convert branches in the country into subsidiaries.
``The move will strengthen KEB's investment banking position in the Asia/Pacific market and create synergy among various business units that will become a new growth engine,'' Klane said.
``Chinese subsidiaries will help us localize and enhance recognition in the Chinese market,'' he added.
Regarding rumors over the sale of KEB, Klane, who took the helm of the nation's fifth largest lender in April, said that the time was not right to push for the sale of the bank controlled by the U.S. buyout fund, Lone Star.
``Despite the rise in KEB's stock prices and some warming in the general markets, I think it is still a very difficult time for large-scale banking transactions,'' he said.
``Our major shareholder at some point will sell off its shares. Despite the rumors, this is not that time,'' he said, adding that it is up to Lone Star to decide on the sale, not KEB.
The press conference came a few hours after the lender announced that it swung to a profit in the second quarter from three months earlier, thanks to lower loan-loss provisions and one-off gains.
The company posted a net profit of 238.2 billion won ($195 million), a major turnaround from the 74.8 billion won losses in the first quarter. The figure was down 3.3 percent from the same period last year.
Its non-performing loan (NPL) ratio dropped by 0.12 percentage points to 1.36 percent from the previous quarter, while its NIM, a key barometer of profitability, fell by 0.01 percentage point to 2.17 percent.
The loan delinquency ratio also declined to 0.96 percent at the end of June, down 0.28 percentage points from the previous quarter. The bank's total assets reached 111.3 trillion won in June, up 7.9 percent from the previous year.