KoreaToday IBK beefs up retail banking

By Kim Jae-won

Staff reporter

The Industrial Bank of Korea (IBK) released a new product titled the "IBK Mobile Account," which provides a 3.5 percent annual interest rate if customers pay their mobile phone bill through the account.

Other banks usually require transferring their salary to a certain account for benefits, but this product only involves making payments for cell phone bills.

The product has been popular here since it was released in January. So far, 9.5 billion won was put into a total of about 200,000 accounts.

"We will promote the individual financial sector by creating new products for students and housewives, who have high potential in the market," an employee of the state-run lender said.

IBK has evolved to become far more than a policy financing institution. Today the bank specializes not only in corporate banking, but also in consumer banking and offers customers a comprehensive range of financial services that meet the rapidly changing demands of the consumer banking sector.

As a result of IBK's continuous growth in the consumer banking sector, total individual customers' savings increased by 3 trillion won from 37 trillion won in 2007 to 40 trillion won at the end of 2008.

Of particular note was a new savings account offering competitive interest rates on small balances-at year-end. Deposits in 329,000 accounts surpassed 800 billion won. The product was awarded the Excellent Product of the year by ten consumer and public organizations.

Consumer loans were also up year on year, helped by the introduction of competitive new personal loan products such as a special household mortgage loan. The bank successfully increased consumer loans by 14.8 percent to 17 trillion won in 2008. Within the total loans, mortgages rose by 8.5 percent to 7 trillion won. As for the delinquency rate, despite the economic situation, the lender was able to limit it to 0.33 percent, resulting in an increase of only 0.2 percentage points higher than the previous year.

The bank focuses on integrated marketing, offering customers greater convenience and providing greater efficiency through a combined marketing strategy that helped to increase new card issues, wage transfer accounts, existing cardholder activation and consumer loans.

As a result, in 2008 IBK operated some 100,000 wage transfer accounts and was successful in activating 147,000 existing cardholders.