KDB is expanding its presence in Asian market

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SaigonTimes English - 34 month(s) ago 13 readings

KDB is expanding its presence in Asian market

Korea Development Bank, a top corporate investment bank in Korea, has established its representative office in HCMC in a long-term endeavor to reinforce its business in Asia and to better serve its clients in this emerging market. The Saigon Times Daily talks with Mr. Roh Yung-Gi, Executive Director, Head of International Banking Division at the Korea Development Bank, about the bank’s business vision in Vietnam in the long term and its specific goals in the near term. Excerpts follow.

KDB is expanding its presence in Asian market

Mr. Roh Yung-Gi
Korea Development Bank, a top corporate investment bank in Korea, has established its representative office in HCMC in a long-term endeavor to reinforce its business in Asia and to better serve its clients in this emerging market. The Saigon Times Daily talks with Mr. Roh Yung-Gi, Executive Director, Head of International Banking Division at the Korea Development Bank, about the bank’s business vision in Vietnam in the long term and its specific goals in the near term. Excerpts follow.

The Saigon Times Daily: First of all, could you please brief us on Korea Development Bank’s vision and its way to realize this vision?

- Mr. Roh Yung-Gi: The vision of Korea Development Bank is to be a “Pioneer Bank of Asia”. We are expanding the overseas operation of our key businesses, as part of our strategy to realize this vision. Our key financial activities include project financing, corporate banking, and private equity investment. Building on these strengths, we are exploring new growth engines for the Korean financial industry by tapping into strategic markets including Asia. For example, we have recently signed a deal to manage the Mongolian Development Bank, to export our financial system and support their economic development. Last year, we acquired RBS Uz of Uzbekistan and we will merge it with UzKDB, which is already in operation there. The new UzKDB will be our foothold in Central Asia. At the same time, we are expanding our network in China and South East Asia, and we are also exploring M&A opportunities in this region.

We are continuously strengthening our overseas profit base, as we think that the top player in Asia is ultimately the top player in the world.

What is the primary goal of your bank in setting up its foothold in Vietnam?

- In the wake of the global economic crisis, the momentum and the axis of global economic growth have definitely shifted to Asia. South East Asia, together with China, has assumed the role of a supplier of essential commodities for the world. Going forward, this region will go beyond being the global production base and will become a major consumer of commodities, to lead global economic recovery.

Vietnam is located between China and South East Asia, so it enjoys advantageous proximity to other regions. In addition, the country has a strong workforce with many talented people, so I believe that Vietnam has strong development potential.

Despite the global economic sluggishness that has persisted since 2008, Vietnam has boasted a stable economic growth rate of over 5%. Thanks to such growth momentum, Vietnam is always mentioned among groups of emerging economies that lead the world economy, such as the MAVINS (grouping Mexico, Australia, Vietnam, Indonesia, Nigeria and South Africa) or the VIP (Vietnam, Indonesia and the Philippines).

Vietnam attracts the second largest number of South Korean investors, behind only China. HCMC is the economic hub of Vietnam, and is also the country’s largest city in terms of population. Korea Development Bank (KDB) has set up its representative office in HCMC as its initial step to establish a bridge for the bank’s operations in Vietnam.

What objectives are mandated to the representative office of KDB in HCMC?

- The top-priority of the representative office in HCMC is to expedite its becoming a branch. To set up a solid foundation in Vietnam, the representative office is mandated to solidify positive relations with the government and local authorities by way of continuous exchanges. The representative office will always seek ways to contribute to Vietnam in the long term rather than merely eyeing profits.

The representative office currently identifies business opportunities with local enterprises. The assets are then booked in its adjacent Singapore branch, establishing a foothold with Vietnam-based assets to quickly transform the representative office in HCMC into a branch.

In addition, besides exploring demands for private funds in Vietnam and South East Asia, the representative office is tasked with looking for investment opportunities and serve as an intermediary for the parent group. At the same time, the office must build up the local workforce in preparation for business development once the office is upgraded into a branch in the future.

Could you please speak about the bank’s long-term business strategy in Vietnam?

- We have plans to allocate business assignments in South East Asia – currently assumed by our branch in Singapore – to the Vietnam branch that will be established later and the Bangkok branch that is being formed. As such, we will create a Corporate Investment Banking Belt (CIB Belt) in charge of corporate finance in South East Asia. In the longer term, we will link up activities in the Philippines and Indonesia, and by then, the branch in HCMC will become the axis of the CIB Belt.

By employing Vietnamese staff as Relationship Managers, we will try to attract strong Vietnamese enterprises as our clientele. We will operate in Vietnam not as a South Korean financier but as a Vietnamese bank. With this perspective, we will strengthen our business to Vietnamese enterprises and grow via localization.

In addition, we will seek to bring into play the strong advantages of each affiliate of KDB Financial Group and maximize their synergy so as to become a financial company that can offer a CIB Total Solution that is essential to enterprises in South East Asia including Vietnam. The CIB Total Solution comprises banking activities as well as services related to investment banking, securities, and finance leasing.

Most of the big South Korean banks have come to set up business in Vietnam. Do you anticipate tough competition?

- It’s correct that South Korean banks have come to Vietnam, and they are supplying credit for Korean enterprises investing in Vietnam, so competition is inevitable. However, KDB will not target only Korean enterprises. The scope of work for KDB will be more than simple corporate finance activities such as loan or trade finance. We plan to actively get involved in large-scale development projects based on our experiences in directly assisting national economic development programs for the Korean economy.

For example, with regard to the new city development project in Hanoi led by Daewoo Engineering & Construction, KDB will financially support the project. In HCMC, a project is underway to develop an expressway, and our Project Finance Center is in negotiations to arrange the loan syndication.

As mentioned earlier, KDB will target not only Korean enterprises, but also Vietnamese enterprises by performing diverse investment banking operations such as project financing and local development financing. Therefore, this advantage will help us prevail in the competition.

What activities KDB can assume to support Vietnam?

- First of all, we will share our know-how on development financing. Currently, we are already exchanging our experiences through the Knowledge Sharing Program, and in doing so, we aim beyond just providing funding or gaining profits. We hope to share our expertise on development financing as well as the history of KDB in assisting the economic development of South Korea.

KDB is a strong player in South Korea’s corporate finance market. Therefore, we can render strong support to Vietnamese enterprises who want to enter markets in South Korea. If Vietnamese enterprises want to list their stocks in South Korea, our affiliate, Daewoo Securities can support them. If Vietnamese enterprises want to boost their relationship with South Korean companies, we can also play the go-between role by matching them with Korean enterprises who are our clients.

South Korea can employ the excellent human resources of Vietnam to actively participate in a wide range of development projects in Vietnam and South East Asia. Meanwhile, the development experiences of South Korea can be a good reference for Vietnam. I am convinced that such mutually complementary partnership between the two countries will develop further.

We will use our profits in Vietnam to re-invest in your country. Alongside the process of making KDB a strong financial institution in Vietnam, we will also help Vietnam’s financial sector develop further on the win-win basis.

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