Kookmin Bank secures $100m FX credit line
Published : Sep 6, 2011 - 19:37
Updated : Sep 6, 2011 - 19:37
South Korea’s top lender Kookmin Bank has recently inked a $100 million foreign currency committed line with an overseas financial firm, sources said Tuesday, joining other banks seeking to diversify their foreign funding.

Kookmin is also in talks with other foreign financial companies to expand its committed lines and is pushing to sell long-term debts later this year in a bid to diversify its foreign exchange maturities, they said.

A foreign exchange committed line incurs extra cost compared with a credit line but offers a more secure source of foreign exchange in times of financial turmoil.

Kookmin’s move comes after the top financial regulator urged major banking groups last month to beef up their management of foreign exchange liquidity amid worries lingering global economic uncertainties may dent the country’s economic health.

Financial Services Commission Chairman Kim Seok-dong had called for the banks to not repeat their practice of depending on the government and the central bank when they face difficulties in foreign exchange procurement, adding foreign exchange sources are currently excessively focused on Europe and the United States. 

In August, Woori Bank, the flagship unit of top banking group Woori Finance Holdings Co., secured a $1 billion committed line and its chairman said the lender plans to expand its committed line to up to $2 billion by the end of the year.

No. 3 lender Shinhan Bank expanded its committed line to $1 billion earlier this year and No. 4 player Hana Bank has built around a $300 million committed line with a Japanese financial firm.

South Korean banks have also been stepping up efforts to issue foreign currency-denominated bonds. In April, Shinhan Bank issued dollar-denominated bonds worth $500 million and sold euro-denominated debts worth $150 million in June. 

(Yonhap News)