IBK 기업은행

In 2010, IBK significantly improved its financing structure by strengthening support for the bank teller service channel. It continued programs to offer preferential treatment for standard deposits, preemptively classified presumed losses and developed special new deposit products for retail customers. Pursuant to the Deposit Interest Rate Guidelines, the Bank made efforts to control levels of high-interest non-standard large-sized deposits. As of December 31, 2010, the proportion of tellermediated transactions increased to 71.0%, up 2.2% from that of the previous year. Among such transactions, the proportion made by retail customers increased by 1.9%p to 27.1%, demonstrating the pace of expansion of the Bank’s customer base.

In order to preemptively secure the foreign currency liquidity, the Bank financed foreign currencies through the issuance of Euro Bond (USD 350 million) and Samurai Bond (USD 420 million) in February and July, respectively. It secured out responsiveness in preparation for possible financial crises, for instance by signing an agreement on the USD 260 million committed line with Mizuho Corporate Bank and RBS. Moreover, it expanded its financing market leveraging a niche market for Asian currencies, including the baht of Thailand and ringgit of Malaysia, thus seeking to diversify financing markets. Moreover, it raised the stability in financial management at home and abroad by extending foreign currency funds needed by overseas branches at the right time.

The Bank of Korea raised its base rate and introduced more conservative loan-to-deposit requirements for domestic banks in July, and again in November 2010. Interest rate volatility increased with greater supply/ demand imbalances and higher inflows of foreign capital to the banking sector. IBK took preemptive action to manage the unstable market conditions, raise financial management revenues and maintain its external reputation by complying with Article 55 of the Bank of Korea Act on reserve requirements. In line with these efforts, the Bank thoroughly analyzed the factors driving financial market changes and systematically managed funds. At the same time, we took measures to monitor the soundness of the Bank’s financial management by managing liquidity and interest rate risk. Through the BOD’s ALM Committee, the Bank analyzes market movements and competitors’ actions to formulate new strategies. These include establishing and adjusting basic measures governing provisioning and internal interest rates, as well as optimal procurement and management of assets and liabilities.

IBK is the only bank in Korea chartered to issue Small and Medium Industry Finance (SMIF) bonds. SMIF bonds give IBK the advantage of lower financing costs compared to other commercial banks. They currently have an issuance limit of 20 times the aggregate amount of the Bank’s paidin capital and reserves.

As a result of implementing such multifaceted financing measures, IBK was able to elevate profits by reducing financing costs. It plans to further control costs using diverse financing channels and methods, along with productivity improvements, upgraded workforce training and increased participation in high-yield projects. By enacting such policies it will increase Bank-wide stability and enhance profitability.

IBK is leveraging its accumulated exper tise and experience as a major player in SME banking to expand its business operations abroad. Applying its core business models for providing SME-oriented financial support, which has been its traditional strength, it is making forays into overseas markets where Korean SMEs have advanced in large numbers. This is a win-win strategy for both parties, enabling IBK to develop systems to promote SME globalization using the synergies that exist between the Bank and SME sector. As of the end of 2010, total loans to SMEs that have established overseas businesses amounted to USD 1,098 million, up 59.8% compared to 2007.

As of December 31, 2010, IBK’s global network includes operations in seven countries: it has one branch in each of New York, Tokyo, Hong Kong, Ho Chi Minh City and London, five branches and two sub-branches under IBK China, and representative offices in Hanoi and Moscow. In every market where it does business, it tailors its services to local markets and conditions. The New York, London, Hong Kong and Tokyo branches provide local F/X services and act as connecting hubs for the global branch network. IBK China, which was established in June of 2009, mainly serves Korean companies that have established operations in China. IBK China generated net income of USD 12.7 million in 2010, achieving 105.9% of its annual target.

Demand for IBK’s financial services is particularly high in China and Vietnam, where Korean companies have advanced most aggressively. Since the Bank entered China in 1997, it has been leading the market by opening a branch in Tianjin, which was the first foreign bank in the region. Its growth in China continued at a steady pace, and in 2010 we opened the Qingdao Chengyang Sub- Branch and added additional locations in Qingdao. With the preliminary approval of its application to open a subbranch in Shenzhen, IBK now has eight business locations in all three of China’s top economic zones. As for Hanoi, Vietnam, it has completed the application for a permit to convert its representative office into a branch, and is actively preparing to establish a branch there.

IBK’s global expansion is carried out using a localization strategy, under which it tailors its products and services to meet the precise needs of the local market. The Bank expands its overseas network by dispatching a Koreabased representative to emerging markets such as Indonesia, India, Malaysia and Cambodia. In this way, IBK is securing future growth engines by developing diversified schemes to advance into global markets.