Kang Seok-hoon, President of Korea Development Bank, Holds 2nd Anniversary Press Conference
Plans 100 Trillion KRW 'Korea Rebound Program' Following Government's Basic Plan
Actively Attracting Middle East Oil Money... Expanding Investment Cooperation with UAE, Qatar, etc.
Securing Stable Financial Structure... Exploring Various Measures Including Capital Increase and Dividend Retention
Kang Seok-hoon, President of KDB Industrial Bank, is holding a press conference on the 2nd anniversary of his inauguration at the Industrial Bank in Yeouido, Seoul on the 11th. Photo by Kang Jin-hyung aymsdream@
The Korea Development Bank (KDB) will operate its own semiconductor super-gap support program on a scale of 15 trillion won over the next three years and supply policy funds worth 100 trillion won to advanced strategic industries. While actively attracting Middle Eastern oil money and expanding global investment cooperation, it will also seek various measures such as increasing the statutory capital limit, retaining dividends, and issuing dividends in kind to secure a stable financial structure.
Kang Seok-hoon, Chairman of KDB, announced these plans at a press conference held on the 11th at the KDB headquarters in Yeouido, Seoul, marking his second anniversary in office. Recently, the government announced a plan to supply 17 trillion won in funds through KDB’s investment related to semiconductor support.
He explained, "We are preparing to establish a special semiconductor facility investment program worth 17 trillion won that will provide low-interest loans at the level of government bond yields across the entire semiconductor industry ecosystem, including manufacturing facilities, fabless companies, back-end processes, and semiconductor equipment," adding, "Even before government investment, we will operate our own program on a scale of 15 trillion won over the next three years while increasing the interest rate benefits."
Over the past three years, KDB has supplied 18.4% of domestic manufacturing facility investment. Accordingly, it is estimated that KDB will be responsible for supplying facility funds of about 100 trillion won out of the over 550 trillion won facility investment plan announced last year by the government’s basic plan for fostering advanced strategic industries.
Chairman Kang said, "If KDB supplies policy funds at the level of 100 trillion won, it is expected to generate a production inducement effect of 80 trillion won across all industries, an annual added value inducement effect of 34 trillion won, and an employment inducement effect of 140,000 people." The annual added value of 34 trillion won corresponds to 1.5% of the nominal GDP in 2023, and the employment inducement effect of 140,000 people corresponds to 0.7% of total employment.
The remaining funds will be concentrated on advanced strategic industries such as secondary batteries, bio-health, displays, and artificial intelligence (AI). He emphasized, "The emergence of AI is regarded as a technological revolution comparable to the steam engine and will have tremendous ripple effects on the economy, industry, and society as a whole, comparable to the Industrial Revolution and the Information Revolution," adding, "We will support securing national AI competitiveness through dedicated financial products and the launch of the AI Korea Fund."
To this end, he mentioned that the most urgent issue to be resolved is to increase the statutory capital limit to about 60 trillion won through an amendment to the KDB Act. He also stated that they will discuss measures to retain dividends for a certain period while realizing stable profits of more than 3 trillion won annually.
Chairman Kang said, "Unlike commercial banks, KDB has a high proportion of stocks of public enterprises contributed in kind and stocks converted from restructuring companies in its capital and assets, which results in high financial volatility," adding, "To secure KDB’s stable financial structure, we will put various measures such as increasing the statutory capital limit, retaining dividends, and issuing dividends in kind on the table and discuss them with the government and the National Assembly." He explained that Germany’s policy finance institution, KfW, does not pay dividends to the government but retains all net profits and reinvests them in policy finance. If KDB retains net profits like KfW, it can improve profitability through restructuring while achieving the same effect as a cash capital increase.
Kang Seok-hoon, President of KDB Industrial Bank, is holding a press conference on the 2nd anniversary of his inauguration at the Industrial Bank in Yeouido, Seoul on the 11th. Photo by Kang Jin-hyung aymsdream@
Investment Cooperation with Middle Eastern Countries such as Qatar to Expand Further Following UAE
Investment cooperation with Middle Eastern countries will also be further expanded. Currently, major domestic companies are struggling to secure funds for large-scale facility investments, and domestic financial institutions’ capacity to supply funds to startups and venture companies is also limited. On the other hand, Middle Eastern countries are striving to reduce their dependence on oil and seek future growth engines such as renewable energy, ICT, and bio.
Chairman Kang said, "We must actively attract Middle Eastern oil money and expand global investment cooperation with the Middle East," adding, "While realizing the UAE’s $30 billion investment plan, we will actively promote global investment cooperation with other Middle Eastern countries such as Qatar."
Since the UAE announced a $30 billion investment plan in the Korean market in January 2023, KDB has established an investment cooperation channel through a partnership with the UAE sovereign wealth fund Mubadala. As a result, at the Korea-UAE summit in May, the government announced that the UAE side is reviewing investment opportunities exceeding $6 billion.
KDB to Establish 'Southern Region Investment Finance Headquarters'... "Aim to Achieve Substantial Relocation Effect Before Moving to Busan"
Chairman Kang also revealed plans to promptly establish the 'Southern Region Investment Finance Headquarters' to achieve a substantial relocation effect even before the actual move to Busan, as an amendment to the KDB Act is necessary for the relocation. KDB was designated as a public institution subject to relocation in May last year.
Under the headquarters, a 'Honam Region Investment Finance Center' will be included, along with the addition of a ‘Regional Enterprise Comprehensive Support Center’ that supports regional startups from founding to scale-up. He explained, "By actively utilizing the existing Southeast region sales organization, we will support companies engaged in traditional core industries facing difficulties in new industry transition and business restructuring to regain vitality through green and digital transition and discovering future growth engines, with dedicated products and future energy funds as part of the 'Business Structure Change-up Program.'"
He also announced plans to enhance internal capabilities of the KDB organization and strengthen communication with employees. Chairman Kang introduced that customized education programs such as AI training courses for cultivating AI experts and Global Business Communication (GBC) training for nurturing global talent have been newly established and expanded, increasing employees’ opportunities for academic training.
He said, "We will continue to do our best to nurture talents who understand the newly changing finance, industry, and technology and lead the future, thereby strengthening the internal capabilities of the organization," adding, "Based on active communication with employees, we will solve KDB’s top priority issues."
Kang Seok-hoon, President of KDB Industrial Bank, is holding a press conference on the 2nd anniversary of his inauguration at the Industrial Bank in Yeouido, Seoul on the 11th. Photo by Kang Jin-hyung aymsdream@
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