Coperate & Investment Banking

Investment Banking

  • The IB Group was reorganized into the larger and stronger CIB Group to counter the lingering difficulties in the financial environment and to boost profits and explore new markets by harnessing synergy between large businesses and institutional clients.
  • IBK Trading Department
Performance in 2017
  • With the emphasis on synergy creation across the entire IBK Financial Group, the CIB Group maintains two bodies to generate synergy that includes representatives from subsidiaries. It arranged refinancing for Incheon Bridge and realized a profit of KRW 22.1 billion, the largest sum from a single project. It also upheld unrivaled leadership in the market for ABS (Asset- Backed Securities) issued by airline companies. As a result, the CIB Group recorded operating income of KRW 325.2 billion, including a record high of KRW 172.6 billion from IB activities.
  • 1. Reinforced technology reviews to boost technology financing: Technology financing refers to the extension of financial support to companies with superior technologies based on a comprehensive assessment of their technological prowess and credit standings.
  • The Technology Financing Department has obtained level 3 of inhouse TCB review capabilities in accordance with the Financial Services Commission’s “Technology Credit Financing Roadmap.” Well positioned to offer swift and systematic support, it conducted roughly 2,000 inhouse TCB assessments in 2017. It is also expanding inhouse TCB valuation infrastructure. A model for valuing technology and intellectual property (IP) rights is under trial operation. Its outcomes are compared with external IP valuation results to verify their credibility.
  • 2. Unique synergy framework to counter matrix organizations of rivals: The CIB Group has set up a unique synergy system that covers the subsidiaries and global business departments of the entire IBK Financial Group. This has created a framework for integrated services spanning loans, investments and consulting. Monthly and quarterly meetings have become more effective by determining attendees based on the prevailing circumstances. Such efforts have paved the way toward diverse opportunities with other subsidiaries and business groups and a vast increase in synergies.
Plans for 2018
  • The main focus areas of the CIB Group in 2018 are reinforcing the policy bank function, profit generation, future growth and risk management. It will strengthen the policy bank function through technology financing and convergence, and provide financial support tailored to each stage of a company’s growth cycle.
  • In addition to enhancing its financial advisory function to expand non-interest income, the CIB Group will step up direct and indirect investments relating to the fourth industrial revolution and gain a strong footing in the energy industry market.
  • 1. Technology financing/convergence and support for start-ups as a policy bank: The Technology Financing Department is building a platform to match the supply and demand of technologies and offering financial support to commercialize new technologies with a view to facilitating technology transfers. Related plans entail signing agreements with public research agencies and industry-academia cooperative bodies. In addition, steps will be taken to obtain level 4 of inhouse TCB review capabilities, which will enable assessments that are on par with those of technology review agencies.
  • To reinforce IBK’s role as a policy bank, greater investments will be made in start-ups and growth companies based on a two-track strategy of utilizing the IBK Financial Group network and venture capital network.
  • 2. Broader earnings base for future growth and risk management: As a means of expanding the income base, the CIB Group will enhance advisory services for SOC (Social Overhead Capital) and PF (Project Finance), key areas of strength, while also pursuing direct and indirect investments related to the fourth industrial revolution and new energy industries. It will draw on an enhanced synergy scheme to explore new markets that will propel future growth of the IBK Financial Group.
  • The already sound risk management system will be further upgraded to minimize new NPLs and bad debts and maintain healthy asset quality. The IB asset portfolio will be strategically realigned for maximum profit generation.
  • IBK Trading Department
  • IBK Trading Department

Cultural Content Financing

  • Cultural contents can generate new added value through convergence with a wide range of industries. It is a new growth sector with the potential for strong job creation. IBK is helping to promote the cultural contents industry by expanding financial support for SMEs engaged in related businesses.

  • IBK Trading Department
Performance in 2017
  • IBK is proceeding with an initiative to provide KRW 1.2 trillion in financing to foster the cultural contents industry over a period of three years (2017~2019). Considering the small-scale operations of many companies in this field and IBK’s role as a policy bank, the support is being extended based on agreements with related organizations.
  • We lend support to cultural content SMEs based on an agreement to promote cultural content-related startups and job creation and Korean Wave (Hallyu) with the Ministry of Culture, Sports and Tourism (MCST) and Korea Technology Finance Corporation. We have also signed an agreement with the broadcaster KBS regarding SME drama production. IBK was the first in the financial sector to launch a loan product secured by drama receivables.
  • IBK has created three indirect investment funds for cultural contents. In addition, we newly invested KRW 5.2 billion, set the equity investment direction (KRW 5.0 billion annually) and made the first equity investment (KRW 1.0 billion in a drama production firm). Such pursuits are bearing fruit. The movie “Along with the Gods: The Two Worlds” attracted a cumulative audience of 14.41 million as of end-February 2018, the largest among movies released in 2017. It is currently ranked the second most popular movie ever in Korea based on box office sales.
Plans for 2018
  • IBK will further expand support for the cultural contents industry by providing annual financing worth KRW 450.0 billion. We will strengthen our activities as a financial partner for cultural contents by pursuing cooperation with related organizations.
    · Korea Technology Finance Corp. (KIBO): Provide guarantees based on cooperation with KIBO Cultural Contents Finance Center (Seoul, Gyeonggi-do, Busan).
    · MCST: Participate in interest rate differential loan project.
    · Korea Credit Guarantee Fund (KODIT): Provide guarantees based on agreement with Korea Creative Content Agency.
    · Korea Film Council: Pursue cooperation for mutual growth using the film promotion fund.
    · Lotte Cinema: Pursue cooperation to nurture SMEs in the movie business.
  • Diverse investment techniques and investment targets will be pursued to construct a stable profit base. To hedge against box office risk and reduce investment volatility, IBK will diversify the investment movie lineup and seek various ways of promoting drama production firms. We will also expand movie genres for investment and invest in new contents linked to convergence platforms
  • IBK will uncover promising new investment targets and extend its equity investment scope to new contents. We will set up funds capable of fostering a cultural ecosystem in order to realize a virtuous investment cycle of cultural contents. Aligned with our mandate as a policy bank, we will continue to invest in low-budget films and creative productions to redirect some of the financial resources that are skewed toward major commercial films to overlooked segments of the industry.
  • IBK Trading Department
  • IBK Trading Department