Banks are faced with the task of streamlining their costs, while at the same time looking to expand abroad to survive in an era of slow growth and limited resources, according to Korea’s chief of one of Korea’s top government-run banks.

“I have always prioritized cost reduction, as it is the most effective way of utilizing limited human and financial resources,” Kwon Seon-joo, chairwoman and CEO of the Industrial Bank of Korea, told The Korea Herald in an interview.

Such policies were shaped not only to address the government’s recent decision to turn IBK back into a state-run financial institution, but also to keep pace with the changing global financial environment, the CEO added.

Kwon was promoted from risk management director to president last December to become the first-ever female CEO in Korea’s banking industry.

“Korea has already entered a long period of slow growth, as is shown in the low gross domestic product figure in recent years,” she said.

Last year, the country’s GDP growth was at 2.8 percent. This year, the figure is expected to see a small increase of around 3.8 percent, according to the Bank of Korea.

“Despite the reality of slow growth, IBK’s key role as a state-run bank means continued support for the nation’s small and medium-sized companies, and the best way to do this is by cutting down costs and creating new business opportunities in the overseas market,” the CEO said.

Accordingly, the bank is planning to establish new branch offices, one each in China and in India, as well as assistant bank offices in Indonesia and Cambodia.

“Our slogan is that we accompany Korean companies wherever they go and provide them with necessary financial services,” Kwon said.

The IBK chief nevertheless admitted that there are limits in competing against other global banking companies, especially those dealing in key currencies.

“This is why we should not be swayed by external factors, but focus on creating stable and sustainable growth,” Kwon said.

She also stressed the importance of signing memoranda of understanding with leading local banks as a means of expanding IBK’s global network at a minimum cost.

“IBK, which is to face new changes as a state-run bank now, will continue to perform its role as a supportive organization for domestic companies, especially SMEs,” she stated.

By Bae Hyun-jung (tellme@heraldcorp.com)