KB Seeking to Become Asias Top 10 by 2013
By Lee Hyo-sik
Staff Reporter
KB Financial Group aspires to become a globally competitive comprehensive financial services company in the post-crisis world through strengthened risk management and second-to-none customer services.
Korea's largest financial holding firm aims to solidify its dominant position in the banking sector by expanding its customer base and sales networks, as well as bolster its non-banking sector to attain a balanced growth and maximize synergy creation among its subsidiaries.
Additionally, the group plans to make inroads into foreign markets with its strong sales capability, brand image and risk management. Through mergers and acquisitions (M&As) and organic growth among its financial units, KB Financial seeks to increase its assets to 600 trillion won by 2013 in a move to join the top 10 financial groups in Asia and top 50 in the world.
KB Financial comprised of nine subsidiaries ― Kookmin Bank, KB Life Insurance, KB Real Estate Trust, KB Investment, KB Credit Information, KB Data System, KB Asset Management, KB Futures and KB Investment & Securities. Currently, KB earns around 96 percent of its revenue from the banking sector.
Promote KB Integration
Under its 2010 core strategies, designed to achieve balanced growth among business units and maximize corporate value, KB plans to integrate subsidiaries and make them function like one entity to maximize synergy.
Since its foundation in September 2008, KB Financial has been making every effort to create positive synergy effects between its banking and non-banking sectors to emerge as the nation's comprehensive financial services provider.
Following the introduction of the Capital Market Integration Act in February 2009, which was designed to break down barriers between banking, securities and insurance, the financial group launched ``KB Plusstar,'' an integrated bank account through which customers not only pay bills and carry out other ordinary financial transactions at Kookmin Bank, but also trade stocks at KB Securities. Since its inception in April last year, nearly 300,000 customers have signed up for the account.
Successful business cooperation among KB units came under the industry spotlight early last year when Lotte took over Doosan's liquor sector. Kookmin Bank financed the merger and acquisition (M&A) deal, with KB Securities providing Lotte with advisory services.
``We are trying not only to foster stronger business cooperation among our subsidiaries, but also to make our 27,000 executives and employees across the nine units feel that we are all one big family. To promote communication among them, we opened an intra community Web site `Synergy Plus+' in August 2009,'' a KB spokesman said.
In order to make the better use of Kookmin Bank's massive customer database by other group units for new business opportunities, the holding company has been working to set up a comprehensive customer relationship management (CRM) network. When it is completed in March, Kookmin Bank customers will be able to enjoy comprehensive financial services, including securities, credit cards, insurance and asset management.
Additionally, the financial group will integrate information technology (IT) infrastructures of its nine units into one by the end of 2011 to bolster information sharing and efficiency, and cut operating costs. The group expects to better manage its electronic database, prevent overlapping investment and reduce operating expenses through a consolidated IT network.
``We will also combine procurement departments across the units to buy computers, papers and other office equipment through the one channel, which will increase our bargaining power and slash expenses,'' the spokesman said.
To more effectively offer comprehensive financial services, KB Financial will set up an integrated private banking center across the country in which customers can subscribe to equity funds, pay insurance premiums and receive consultations from professionals on wealth management.
Optimize Business Portfolio
KB Financial said it will seek to strengthen its core competitiveness and maximize profits, as well as balance its business portfolios between the banking and non-banking sectors. It will also strengthen sales networks and create greater value for customers.
The group will pursue organic growth and M&A at the same time to create synergy among subsidiaries, while acquiring businesses in the non-banking sectors, such as in the securities, asset management and insurance fields, to secure future growth engines.
It said M&A is one of key reasons behind Kookmin Bank's transformation into a financial holding company and expansion through this in the banking sector was an important strategy to stay a market leader.
``Additionally, through the expansion of our non-bank affiliated operations, enhanced competitiveness, and multiple financial service offerings, we will seek to increase customer satisfaction and create synergy through the maximization of corporate brand value, ultimately contributing to the growth of Korea's financial industry,'' the spokesman said.
To more effectively create corporate value and meet client needs, the holding company will provide differentiated customer services and a range of innovative financial products, as well as produce a more talented and trustworthy sales workforce.
Strengthen Risk Management
The group will make more effort to enhance its preemptive risk management capacity to effectively monitor market conditions and prepare for the unforeseen financial market turmoil.
With the intensifying competition among its rivals and the increasingly saturated domestic financial market, KB will more aggressively advance into foreign markets with its strong sales capability, brand image and risk management to secure new sources of income.
Its overseas expansion strategy centers on three regions ― the Common Wealth of Independent States, China and Southeast Asia ― creating a ``KB Triangle Network.'' The spokesman said if the group uses its core strength as an effective localization strategy to enhance overseas businesses, the portion of overseas units will increase to make up 10 percent of the group's total assets in the near future.