Banks, “Are There Any New Income Sources?”

Domestic banks began to seek for new income sources as the household loan, the best profit business is matured.

Because of instable economy, the demand for fund by private companies doesn`t increase and household loan, the unique income source is contracted by government restriction.

Therefore, the banks try their best to extend non-interest income base such as commission or develop customized loan for self- employer and professionals.

Kookmin Bank diversifies income sources by reinforcing Private Service for high-income earners and extending additional services for serving high commission and selling profitable securities.

Kookmin Bank also has a plan to reinforce loan to small and medium companies and SOHO (Small Office Home Office) business. For the operation, it will establish task force teams for SOHO in 307 branches at 15th of November, and will extend the teams to all of its 1,500 branches.

Woori Bank will operate Comprehensive Financial Team (CFT) established for investment finance in the early of this year at full scale to extend commission income through investment bank services. CFT has made 100 billion income through the M&A commission since its establishment.

Lee Duck-hoon, President of the bank said, “I will improve the composition of income source to increase commission income to 2 trillion.”

Woori Bank will also reinforce the operation for small and medium business that doesn`t reach annual revenue of 7 billion because the operation is not the subject to external audit.

Seo Dong-myeon, Vice President commented, “The dishonor rate of small and medium business is the lowest level since the early of 1990s.” and added “As the establishment of new business increase, it is very attractive market.”

Koram Bank has a plan to reinforce PB services and extend the business of profitable securities and investment products. Koram Bank sold 1.1 trillion of investment products by September and it is expected to record 2 trillion sell by the end of this year.

Shinhan Bank and Hana Bank have a plan to extend the loan to high-income professionals.

Shinhan Bank began to promote loan for high-income professionals at 7.7% annual interest rate from the last month that is much lower compared to ordinary credit loan at 8.75% - 12.25%.

Hana Bank began to credit loan to high-income professionals from 16th and extended the limit of the amount from 150 million won to 300 million won and try to secure reliable customers who are working for stable or public corporations.

Chi-Young Shin higgledy@donga.com