KDB's H1 net more than doubles on rising non-interest income

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SEOUL, July 27 (Yonhap) -- South Korea's state-run Korea Development Bank (KDB) said Wednesday its first-half earnings more than doubled from a year earlier on high commission income from its investment banking business.
Net income came to 1.02 trillion won (US$972.7 million) in the January-June period, up 148.6 percent from the previous year, said the bank, an affiliate of KDB Financial Group Inc. Its operating profit jumped 106.3 percent on-year to 1.29 trillion won.
The state-run bank said the non-interest commission income rose 44.7 percent to 359.1 billion won as it earned higher commission income from its investment banking business by handling project financing projects and takeover deals.
Kim Young-kee, vice chairman of KDB, said in a press conference that the bank will make efforts to increase the number of branches in a bid to secure the deposit base, but it will seek to purchase a financial firm if chances arise.
"As situations (about takeovers) have changed, we plan to raise the number of branches in the near term. But if opportunities arise, we will also seek to buy a bank," Kim said, referring to KDB Group's failed attempts to buy Woori Finance Holdings Co.
The government, which owns 100 percent of the group, should start to reduce its stake no later than May 2014 under the current blueprint for the KDB's privatization. Securing stable funding sources is critical for the group to brace for the privatization as KDB largely focuses on corporate and investment banking.
The financial regulator scrapped its plan to sell Woori Finance to KDB Financial Group due to strong public criticism.
KDB Financial Group is seeking to boost its bank deposit base in the run-up to the planned privatization of the group and in a bid to meet stricter bank capital rules called Basel III.
A senior official at KDB Financial Group said the group may have difficulty in listing its shares on the Seoul bourse this year as planned because it should first raise its deposit base to get a better initial public offering price.
Under the privatization plan, KDB Financial will seek to list its shares on the Korean stock market this year and on foreign stock markets in 2012.
KDB earlier raised its full-year deposit target to 4.5 trillion won from 3.5 trillion won set previously because the bank achieved the target faster than expected.
Bank deposits account for 21 percent out of KDB's total funding sources. The bank mostly finances funds through debt sales.
In an effort to strengthen the deposit bases, KDB will seek to increase the number of its branches to around 70 this year, up from 50 currently in operation. Next year, the bank plans to open another 30 branches.
sooyeon@yna.co.kr