KB unveils plans to recover trust, brace for contingencies

KB Financial Group said Friday it will open an exclusive counter to offer financial consultations for people in the low- to middle-income brackets, expand support for small companies and create more jobs.

KB unveiled the package of new measures as follow-up to a meeting of the nation’s largest financial groups and Financial Services Commission chief Kim Seok-dong last month. Other financial groups such as Woori, Shinhan, Hana and Nonghyup also revealed similar plans Friday.

KB said its six new major policies are aimed at “preparing against a possible economic slump and recovering public trust in the banking sector through greater support of small- and medium-sized firms as well as low- to middle-income earners.”

In addition to providing in-depth advice on loans for low-income earners through the exclusive counter and backing small businesses through a 200 billion won ($178.6 million) fund for shared growth and a 150 billion won fund for low-interest loans, KB said it will continue efforts to curb snowballing household debt.

The financial group said it will encourage borrowers with excessive debt to shift to long-term amortizing loans, introduce a debt control program for them and offer various options to pay back the loans in consideration of their financial situations.

KB said the KB Hope Management Committee headed by its chairman Euh Yoon-dae will beef up protection for financial consumers.

To better assist exporters and investors, KB plans to expand its corporate consultation center and place one in each branch, detect possible loan defaults in advance to defer the repayment, extend the loan terms or run pre-workout programs.

To recover the public trust the local financial sector lost over alleged collusion to rig the interest rates of certificates of deposit, KB said it will clarify the grounds on which the interest rates are set or revised, draw up a set of criteria for branch chiefs in setting the spreads and allow customers to better exercise their right to demand rate cuts.

To normalize the CD issuance and distribution market, KB said it will issue 130 billion won worth of CDs every month and expand the allotment to 230 billion won a month next year.

KB also organized a task force to monitor the soundness of its assets and manage non-performing loans, and conduct stress tests to prepare against a recession that could be caused by the eurozone fiscal crisis and mounting household debt.

It also maintains over $2 billion in surplus funds and diversifies the terms of foreign currency financing for stable foreign exchange liquidity management.

By Kim So-hyun (sophie@heraldcorp.com)