IBK to network with foreign lenders

The state-run Industrial Bank of Korea (IBK) plans to be proactive in building strategic ties with foreign lenders to help small to midsized Korean firms that are engaged in business abroad as part of its overseas expansion plans, its chief has said.

Currently, IBK has 16 overseas operations including a wholly owned unit in China. IBK mostly caters to small- and medium-sized enterprises in Korea.

“Although we cannot make a foray into every country, we will make efforts to create a global network by the end of this year,” Cho Jun-hee, president of the IBK, told reporters late on Wednesday.

His vision to make such a network will be realized by expanding the networks of its operations in Asian countries and forging strategic partnerships with foreign lenders in countries with few Korean SMEs.

“We plan to open an office in New Delhi in October. The bank also plans to clinch a tentative deal with the Bank of China this year for a business tie-up.”

The president also said his bank does not have exposure to Kukdong Engineering & Construction, a midsized local builder which filed for court receivership on Wednesday.

Woongjin Holdings took over the builder in June 2007 as part of its expansion strategies, but the property market slump and funding squeeze led the group to suffer from a pile of debts. Woongjin Holdings also filed for court receivership on the same day.

Cho said the IBK’s lending to Woongjin Holdings amounted to between 600 million won ($537,300) and 700 million won, and its loans to companies doing business with the group amounted to around 14 billion won.

“Short-term funds may be squeezed, but there would be no serious problem for such companies if their financial health remains sound,” Cho noted.

Yonhap