SEOUL, May 21 (Korea Bizwire) — South Korean banks are redoubling efforts to tap into possible business opportunities in North Korea in the wake of a recent thaw in inter-Korean relations, sources said Monday.
The two Koreas held a historic summit in late April, adopting a joint declaration that focuses on working toward a complete denuclearization of the Korean Peninsula and ending the Korean War. It also calls for actively pursuing economic projects agreed upon in 2007, including an expansion of a joint industrial complex in the North Korean city of Kaesong and the launch of cross-border cargo railway service.
A U.S.-North Korea summit, slated for Singapore on June 12, has also raised hopes that Washington may ease sanctions on Pyongyang, which may open the way for local banks to enter the communist North.
According to the sources, KEB Hana Bank is seeking to establish a task force as early as this month, which will be charged with preparing for inter-Korean financial business.
A company executive will initially be in charge of the preparation committee, while an outside expert will take over depending on the situation.
The task force will study North Korea’s politics, economy and society, while reviewing possible business opportunities for the lender and its parent holding company.
KEB Hana is not alone. Shinhan Financial Group Co., one of South Korea’s major financial holding firms, is also seeking to set up a consultative body comprised of officials from its subsidiaries in a bid to deal systematically with changes in inter-Korean ties and economic cooperation between the Koreas.
Shinhan will seek a cooperative network with outside North Korea experts to map out strategies for financial support for inter-Korean economic cooperation, participation in joint business projects led by state policy lenders and help with the establishment of infrastructure for North Korea’s financial reform.
Early this month, major lender Woori Bank launched a task force on support for inter-Korean financial cooperation. The special team, comprised of officials from eight departments and the Woori Finance Research Institute, will be in operation till the end of July.
The task force is reportedly discussing ways to reopen its branch in the now shuttered inter-Korean industrial complex in the North Korean town of Kaesong.
Woori had to close its branch in the factory park as South Korea pulled the plug on its operations in February 2016 to punish the North for its fourth nuclear test and long-range rocket launch.
The factory park — opened in 2004 — had been hailed as a key symbol of economic cooperation between the rival Koreas as it combined South Korean capital and technology with cheap labor from North Korea.
KB Financial Group is known to be considering whether to form a task force on possible business in North Korea.
Meanwhile, the Export-Import Bank of Korea and other state lenders are focusing their efforts on boosting research on North Korea by expanding think tanks and forming a new research body, according to the sources.