IBK to upgrade services for foreign customers

CEO plans to increase dividend payout ratio

By Kim Bo-eun

Yoon Jong-won

The Industrial Bank of Korea (IBK) will improve and expand services for foreign customers, its CEO Yoon Jong-won told reporters in a written interview, Sunday.

"The number of foreign residents is estimated to grow from 2.52 million in 2019 to 6 million in 2030, and there is a need to provide them proper financial services," Yoon said.

"We are planning to upgrade the existing application for foreigners so that foreign workers can access financial services, whether they are in the process of entering or leaving the country, or working here."

IBK will expand the range of products and services for foreign customers, as well as languages these are offered in, the CEO said, in the interview to mark the first 100 days since he took office.

Yoon also noted IBK is seeking to strengthen its foothold abroad to assist Korean SMEs there.

The state-run lender aggressively expanded its overseas presence in recent years. It currently operates 58 outlets in 12 countries.

Last week, IBK received approval from the financial authority in Myanmar, which enables the lender to switch its office there to a subsidiary without first making it a branch.

The IBK subsidiary in Myanmar will be able to do business with local firms and establish up to 10 bank branches there.

"We will review expansion in the case there is demand from SMEs in overseas markets for support," Yoon said.

Boosting IBK's stock price is a pressing task for the lender.

The price has fallen over the past year, recording its lowest point on March 19 at 5,860 won per share. Since then, the price has risen to 7,586 won as of Friday's closing price, but this is still only about half the price of a year ago. IBK's price per share was 14,570 won on April 15, 2019.

"The most important task in managing stock price is raising the intrinsic value of the bank," Yoon noted.

"Therefore, we will boost efforts to expand our customer base based on innovative finance, enhance the soundness of SMEs, strengthen cost management and diversify sources of revenue.”

IBK will also seek to gradually raise the dividend payout ratio, the CEO added.

Yoon said the bank is looking into key tasks to make IBK a” top-notch financial group,” which include digitalization, assisting startups, and creating synergy with other IBK units.

IBK has drawn up a task force on innovation. The team will look into various tasks including innovating loan practices so that financing can be provided for more promising startups.

In the meantime, dealing with the impact of the coronavirus outbreak on SMEs is the bank's priority.

"Many sectors are seeing a big fall in sales, putting businesses in a desperate situation," Yoon said. "As a state-run lender, we are focusing on supporting and protecting SMEs and small businesses."

IBK has expanded the amount of loans for SMEs and done the same for ultra-low interest rate loans for small businesses.

At the same time, Yoon said the bank would manage risks by seeking to help businesses restructure to deal with the crisis.