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Financial sector bounces back

The great universe is torn asunder

Korean financial institutions are getting back to basics. Hurt by the mismatch caused by funding in foreign currencies and lending domestically, and badly burnt by concentrating that domestic lending on a few large entities, the survivors are focusing once again on funding through retail deposits and lending to small and medium-sized enterprises.

"As well as our strategy of creating a clean bank - management targets for 1999 include a BIS ratio of 10% - we have placed great emphasis on creating a focused range of retail products," says Kim Jung-tae, chairman, president and CEO of H&CB, the new name for Housing & Commercial Bank. "The takeover of Dongnam Bank added that institution's strong small and medium-sized enterprise customer base to our established retail base." Kim is one of Korean banking's most modern managers in outlook. He is candid about past problems - lack of profit focus and transparency - and aggressive in pushing the bank towards full internal standards

At Cho Hung Bank retail is also seen as the way to go. Like H&CB the bank had to take over an ailing rival - Chungbuk Bank - under the government's plans for restructuring the sector.

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