November 28, 2024

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Industrial Bank of Korea President and CEO Kim Sung-tae speaks during a press conference held at the headquarters of Korea Federation of Banks in Seoul, Tuesday. (IBK)

State-run Industrial Bank of Korea aims to double its overseas profits in the next three years by establishing entities in Vietnam and Poland, its president said Tuesday.

“We will expand our (global) network ... such as converting the Vietnam branch into an entity and setting up a new entity in Poland to support small- and mid-sized firms entering overseas markets,” IBK President and CEO Kim Sung-tae said during a press conference held to mark his first 100 days in office.

By 2025, the year when Kim will end his three-year term, the policy lender aims to increase its profit from global business to 250 billion won ($189.7 million) from the 126 billion won it logged in 2022.

The bank is currently operating 59 branches in 12 countries to support small- and medium-sized enterprises making a foray into foreign countries. In Southeast Asia, where the lender sees high growth potential, it operates 39 branches in six countries including Cambodia, India, the Philippines and Indonesia.

The Myanmar unit suffered net losses in 2022 and 2021 due to national emergencies occurring in the country immediately after IBK's establishment in January 2021, hindering operations.

“By resuming operation in part and putting in effort to reduce fixed costs, a turnaround is expected this year. As of the end of February this year, we had a surplus of 160 million won,” Kim said.

For small- and medium-sized enterprises and self-employed business owners in Korea, the bank will provide 56 trillion won in loans and introduce an interest rate reduction program worth 1 trillion won this year to help alleviate the financial burdens of those struggling from the fallout of the COVID-19 pandemic.

“We decided to supply SME loans worth 56 trillion won, an increase of 3 trillion won from the previous year … and set a goal of offering 200 trillion won to SMEs and mom and pop store owners over the next three years,” he said.

Pointing out that investments into Korean startups have been rapidly drying up after the sudden collapse of Silicon Valley Bank, which focused on the startup sector, Kim said IBK would supply venture capital of over 2.5 trillion won, centering on technology startups over the next three years.

It will play the role of a “seed bank,” especially for startup firms in their early stages, as they often stand on the verge of collapse due to fund shortages in the first one to three years of operation.

“If we play a prime role through bold investments in these startups, other market players will also start to make investments again,” he said. IBK is also in talks with the government to create a separate venture capital entity.

By Park Han-na (hnpark@heraldcorp.com)