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KDB chief pledges W100tr high-tech fund, sticks to Busan relocation

June 11, 2024 - 18:42 By Choi Ji-won
KDB Chairman Kang Seog-hoon speaks during his second-anniversary press conference held at the bank's headquarters in Yeouido, Seoul, on Tuesday. (Yonhap)

The chief of the state-run Korea Development Bank on Tuesday unveiled plans to provide 100 trillion won ($72.5 billion) in policy funds for the development of high-tech industries while continuing efforts to push for the relocation of headquarters to Busan.

KDB Chairman Kang Seog-hoon made the announcement during his second-anniversary press conference held at the bank's headquarters in Yeouido, Seoul, and called for swift legal revisions to implement the plans.

"We are currently preparing for a 100 trillion won 'Korea Rebound Program.' To do this, the bank must expand its capital," Kang said Tuesday.

According to Kang, the 100 trillion won funding is based on the government's 2023 plan to nurture high-tech industries -- including chips, displays, secondary batteries and bio -- which includes an investment of around 550 trillion won from private companies in the sectors.

"With KDB providing 18.4 percent of domestic manufacturing facility investments over the past three years, we estimate we will need to contribute approximately 100 trillion won out of the over 550 trillion won," Kang explained.

Kang anticipated that the 100 trillion won policy funding would annually induce 80 trillion won in production, 34 trillion won in added value, and create 140,000 jobs across all industries.

Kang urged a revision of the Korea Development Bank Act to raise the legal capital limit, stagnant at 30 trillion won for a decade. With the bank's capital at 26 trillion won and an additional 2 trillion won planned for the semiconductor industry loan program, only a fraction of the capital limit remains.

"To maintain KDB's Bank for International Settlements capital ratio at its current level, a capital increase of 10 trillion won is essential. For this, legal amendments to raise the statutory capital limit to around 60 trillion won needs to be made urgently," he emphasized.

To further boost KDB's capital, Kang also discussed new measures like withholding dividends and offering non-cash dividends could be introduced.

The chairman reiterated his dedication to relocating the Korea Development Bank's headquarters to the southeastern port city of Busan, a move supported by the government to foster balanced growth beyond Seoul.

Relocating the headquarters requires amending the provision in the KDB Act mandating its location in Seoul. Despite efforts in the 21st National Assembly by the government and the ruling party, legislative attempts faced obstacles.

"Upon the establishment of the 22nd National Assembly's legislative committee, we will persist in convincing parliament regarding the amendment and strive to achieve the benefits of relocation prior to its full implementation," Kang stressed.