The bank is also focusing on closer collaboration with banking institutions both at home and abroad in order to support large-scale overseas projects. Recently, it has enhanced its role as a financial arranger by signing MOUs with its counterparts in the Middle East, such as Commercial International Bank and First Gulf Bank. It also launched joint marketing programs in September and November 2011 in the United Arab Emirates, Saudi Arabia and Egypt, three of the largest plant markets for Korean companies, as well as inked MOUs with 11 local banks so that Middle East funds can be utilized in major construction projects.
For 10 days from March 4 this year, similar campaigns were run in Brazil, Mexico and Columbia. Korea Eximbank visited 24 ordering organizations, government agencies, shipping companies and banks in the region in order to seek ways to better buttress Korean enterprises doing business there.
More recently, it flew to Vietnam, Indonesia and Singapore in September 2012 to discuss further participation and joint support of Korean corporations with 13 ordering bodies, government arms and financial institutions. The three Southeast Asian nations are placing an increasing number of large-scale construction orders these days.
In the meantime, Korea Eximbank is striving to provide banking facilities in Korea in order to participate in overseas financing projects in an attempt to solidify its presence in the global project financing market.
It has signed business cooperation agreements with Korea Development Bank as well as eight commercial banks, five security companies and three insurance companies so as to lay the foundation for shared growth of public and private financial institutions. It is planning to increase co-financing projects down the road in order to attract more foreign investment and share the benefits of a higher credit rating.
With all of the world’s three largest credit rating agencies -- Moody's, Standard & Poor's and Fitch Ratings -- recently adjusting Korea’s rating upward, the bank’s spread for offshore borrowings is expected to be lowered by at least 15bp, or 0.15 percentage points. If this happens, Korea Eximbank, the largest issuer of foreign currency bonds in Korea, will save more than 18 billion won in annual interest expenses.
Korea Eximbank aims to make use of this to cut PF interest rates in the plant construction, shipbuilding and power generation sectors. The idea is to help Korean exporters competing with Japanese, Chinese and European win more major projects around the world. The bank is also planning to raise the ceiling of the trade bill rediscount for small and mid-size exporters from 2.7 trillion won to 3.7 trillion, while reducing the rate by up to 0.4% so that the exporters can enjoy practical benefits regarding their liquidity situation.
In 2011, Korea Eximbank procured US$10.3 billion, thus succeeding in exceeding the annual goal of US$8.8 billion. Industry experts praised this performance, saying that it would contribute to Korean companies’ winning and implementing big-scale projects without having to worry about payments.
This year, it has raised US$8.9 billion in foreign funds until September, approximately 81% of the annual target of US$11 billion, including US$2.25 billion in global bonds, US$1.25 billion in Samurai bonds and US$1.2 in Uridashi bonds.
The bank is also making significant efforts in social contributions. Its corporate social responsibility activities are not simply limited to its duties as a member of society but extend to increasing their importance as a key strategy for mutual growth. It is in this vein that the bank is trying to diversify the fields of social contribution in connection with export financing, an economic development cooperation fund (EDCF), and Inter-Korean Cooperation Fund, etc. In particular, it is concentrating on assisting multicultural families and immigrants from those developing nations in Asia where Korea is enjoying trade surpluses, as well as providing them with foreign aid.
Korea Eximbank has stepped up its CSR budget consistently since 2010. This year, it will spend 4.5 billion won for the purpose, up 122% from last year.