South Korea’s policy lender Korea Development Bank (KDB) has today announced a series of reforms on the back of stinging criticism it has faced for its handling of the nation’s troubled shipping and shipbuilding industries.
KDB chief executive Lee Dong-geol warned the bank from now on will avoid handing out very large loans to a single company or a single industry even if it contributes much to the economy and its bankruptcy could have a serious impact.
The bank will reduce the ratio of loans heavily focused on the troubled local shipping and shipbuilding sectors as part of its risk-management efforts, Lee said.
KDB is the main creditor bank of three shipbuilders placed under court receivership — Daewoo Shipbuilding & Marine Engineering, Samsung Heavy Industries and STX Offshore & Shipbuilding Co. It is also the main creditor of the country’s two major shipping lines — Hanjin Shipping and Hyundai Merchant Marine.
Separately, the nation’s finance minister, Yoo Il-ho, toured a shipyard in Ulsan today and promised to try and smooth the painful restructuring going on across Korean shipbuilding companies.
“The government will draw plans to bolster smooth corporate restructuring and business reorganization, and to improve the competitiveness of key industries,” Yoo said today, adding: “We will utilise all measures to fend off job instability and a slowdown in the local economy.”
Measures to support corporate restructuring are expected to be included in a set of stimulus plans scheduled to be released by the Finance Ministry next week.