By Kim Jae-won
The Export-Import Bank of Korea (Korea Eximbank) has served a critical role in Korea’s ascent as a global industrial power by helping local exporters, the main providers of trade finance. But its opinionated bureaucrat-turned-CEO Kim Yong-hwan is thinking of bigger things. An international conference on the prospects for the culture and entertainment industry provides a hint of the aspirations he has for the future.
His aim is to transform Korea Eximbank from a one-dimensional export finance provider into a true global investment power that hits different markets and proactively attacks opportunities. These chances will increasingly come from areas other than Korea’s main industries such as technology, cars and construction, Kim says, pointing to the global boom in the consumption of Korean pop music, television and films.
While these have been dismal times for commercial finance companies, kicked in the teeth by the global slowdown, Kim is determined to exploit the softened competition and pounce at buy-low investment opportunities.
``The major foreign investment banks and other commercial lenders have been hit badly by the global crisis. Not many of them can invest in big international projects nowadays. But we can and this will help keep activity going where it needs to be,” Kim recently told The Korea Times.
Eximbank Korea launched a specialized investment banking department in July last year, with Kim hiring a number of industry veterans who had previously worked for global investment banks to blend with his incumbent specialists.
The goal is not entirely about profit as the bank continues to show commitment to supporting developing nations by managing the Korean government’s low-interest loans, dubbed the Economic Development Cooperation Fund (EDCF).
The bank recently announced plans to finance a project to build a medical school and general hospital in Juba, South Sudan. This was in honor of late Korea-born Catholic priest John Lee Tae-seok who died of cancer in 2010 after years of taking care of children and poverty-struck families in the war-torn country.
``We will spare no efforts to support the project to spread the spirit of love and sharing of Father Lee, who humbly helped the Sudanese,’’ said Kim.
Korea Eximbank supports the national economy by attracting foreign capital at a low cost. It signed a $100 million loan facility agreement with the National Bank of Abu Dhabi earlier this month, increasing its foreign exchange reserves. The bank has secured foreign currency worth about $9 billion so far this year, having reached more than 80 percent of its annual goal of $1.1 billion.
More than half of its foreign exchange reserve has come from non-dollar currencies, such as yen and Australian dollars, diversifying its portfolios and reducing its reliance on U.S. dollars.
Korea Eximbank has become the first Northeast Asian bank to issue bonds in Saudi Arabian riyal. In November last year, the lender issued bonds worth 750 million riyal (about $200 million) with a 170 basis point spread in Saibor, the Middle East country’s standard market interest rate.