KDB opens Qingdao branch
KDB Chairman and CEO Hong Kyttack, fifth from right, with Shandong Province Vice Governor Xia Geng,fourth from left, and officials from the bank and the province during a ceremony at the Shangri-la Hotel in Qingdao to celebrate the opening of the state-run bank’s local branch, Friday. / Courtesy of KDB
By Choi Kyong-ae
The Korea Development Bank (KDB) has opened its Qingdao branch in a move to strengthen its presence in China where Korean companies are expanding their investments due to growing local demand, the state-run bank said Sunday.
“We will strengthen our customized services for Korean companies operating in Qingdao, Shandong Province, as well as local businesses that are financially healthy,” KDB Chairman and Chief Executive Hong Kyttack said.
KDB will expand its financial support to small and medium companies that plan to advance to China after the free trade agreement between China and Korea took effect Sunday, Hong said.
China is Korea’s biggest trading partner and Korea is China’s third-biggest partner.
Hong met Shangdong Province Vice Governor Xia Geng on Friday at the Shangri-la Hotel in Qingdao to discuss ways to expand cooperation between KDB and the province, before holding a ceremony to open the branch.
At the end of last year, 7,921 Korean companies had invested in Shandong Province, with the investment size reaching $13 billion. Trading volume between Korea and Shandong Province were valued at $35.2 billion last year, the bank said.
Among Korean banks operating in the province, KDB said it was the first to handle foreign-exchange transactions that include foreign currencies and the Chinese yuan. The yuan, also known as the renminbi, or RMB, joined the International Monetary Fund’s benchmark foreign exchange basket to become the fourth most-utilized currency for worldwide payments.
With the opening of the branch, KDB now has local business networks in five regions ― Beijing, Shanghai, Gwangzhou, Shenyang and Qingdao. In its expansionary move, the state-owned bank opened a branch in Sydney, Australia, Dec. 8, to win more overseas project finance deals, it said.
“KDB has been beefing up its overseas networks to find a new growth driver away from the nearly saturated domestic market,” the bank said. “As of Sunday, KDB has five corporate bodies, nine branches and eight offices.”
KDB is among Korean banks stepping up their expansionary drive into global markets, particularly emerging markets, to survive tougher competition and ever-falling margins due to record low interest rates. Korea’s benchmark interest rate is at a record low 1.5 percent after four cuts since August last year to support growth.
While seeking a bigger presence in China, KDB is also focusing on risk management in the world’s most populous country and Asia’s fastest-growing economy.
“We have sent officials in charge of risk management to prepare for any impact from China’s ongoing slowdown on our operations there,” the bank said.