The state-controlled KDB Financial Group and the Export-Import Bank of Korea are likely to have a more significant role as the two representative policy-financing firms under the Park Geun-hye administration.
Following President Park’s reiteration of the necessity to bolster state-policy financing last month, the Financial Services Commission is set to announce its plan to overhaul the policy bank structure later this month.
According to regulatory officials at the FSC, the coming reform is to include KDB Financial Group’s takeover of the Korea Finance Corp. established four years ago.
The so-called KoFC, was spun off from the financial group in 2009, as an intermediate step in the Lee Myung-bak administration’s earlier attempt to privatize KDB Financial.
While KDB Financial will absorb KoFC’s domestic function of project financing for small and mid-sized enterprises, the Export-Import Bank is to acquire its overseas function, said an FSC official.
The coming road map means that the incumbent government and financial authorities have completely scrapped the sale plan for KDB Financial.
The FSC also plans to instruct KDB Financial to suspend its move to sell KDB Daewoo Securities, the nation’s No. 1 stock brokerage house, for a certain period.
Though the financial group had pushed for the resale of the securities unit in a bid to retrieve taxpayers’ money, financial authorities have decided to prioritize its ongoing project to privatize Woori Financial Group involving Woori Investment & Securities for the time being.
However, irrespective of the scrapped plan for KDB Financial’s privatization, the group’s several non-banking units such as life insurance and asset management sectors could be put up for auction under the government’s policy to secure more state funds.
In addition, the Eximbank will likely be in charge of the greater part of funding to Korean SMEs or venture start-ups advancing to the emerging overseas market.
“As the government is also considering selling some of its dominant stake in the Industrial Bank of Korea, one of the four major state-policy financial firms with KDB, Exim and KoFC, the two ― KDB and Exim ― are likely to take on a big brother role over the next few years,” said an executive at a commercial bank.
While the Finance Ministry holds a 65.1 percent stake in IBK, it is seeking to dispose of about 15 percent and maintain its position as majority shareholder with a controlling stake of about 50.1 percent.
Meanwhile, some KoFC officials have strongly protested policymakers’ move to revamp the structure via being absorbed by KDB.
By Kim Yon-se (
kys@heraldcorp.com)
