KB Kookmin Bank transforms London entity into branch to target CIB mkt

2018.05.20 10:57:45 | 2018.05.20 11:00:36

South Korea’s KB Kookmin Bank held an opening ceremony of its branch in London, United Kingdom, on Thursday. [Photo provided by KB Kookmin Bank]이미지 확대

South Korea’s KB Kookmin Bank held an opening ceremony of its branch in London, United Kingdom, on Thursday. [Photo provided by KB Kookmin Bank]

South Korea’s KB Kookmin Bank seeking to expand its presence in the overseas corporate and investment banking (CIB) market has transformed its local entity in the United Kingdom into a branch to lift the cap on its credit ceiling to handle large loans.

According to KB Kookmin Bank on Friday, Kookmin Bank International London, KB Kookmin Bank’s U.K. entity set up in 1991, switched operations to become a branch office as of Thursday (local time).

KB Kookmin Bank expects that the latest change will allow the lender to secure larger funds than before in the U.K. based on the credit rating of its headquarters in Korea and ramp up consortium loans with higher credit ceiling, one of the requirements to reinforce corporate and investment banking business.

The London entity last year raised $2.7 million in net profit with total assets reaching $470 million. As an overseas subsidiary without own credit ratings, the London subsidiary, however, has had only a limited access to the loan market. Its low credit ceiling has also prevented it from handling large amounts of corporate loans. To lift such restrictions on its London operations, KB Kookmin Bank launched preparations two years ago to switch the London entity into a branch. For the same reason, the company has transformed its Hong Kong operations into a branch in January last year.

KB Kookmin Bank plans to develop its London and Hong Kong branches as global hubs for its CIB business in the mid- to long-term. Following the shift in operations, the total asset of its Hong Kong branch last year jumped 60 percent on year to $1.23 billion and net profit 41 percent to $6.8 million.

The latest move is also part of KB Kookmin Bank’s ongoing efforts to boost its overseas businesses.

According to the lender’s first-quarter earnings announcement, the combined net profit of its five overseas operations in the U.K., Hong Kong, China, Cambodia, and Myanmar reached 1.815 billion won ($1.68 million), managing to swing back to profit from a year ago when net loss reached 1.078 billion won during the same period.

In particular, the lender’s Myanmar subsidiary launched in March last year finally reported a profit of 49 million won in the first quarter ended March this year after logging losses. Its subsidiary in Cambodia also managed to raise 764 million won in net profit in the same period, up from 325 million won in 2016 and 605 million won in 2017.

By Chung Joo-won and Lee Eun-joo

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