Can you talk about your latest transaction and what it means for IBK?
This $400 million five year transaction has been a great success. it is out 3rd Eurobond transaction. We did two last year. And we are the first Korean to issue after the Republic of Korea. Therefore that is very significant. Indeed, we are the first Korean policy bank to issue after the Republic. Our deal has been a win-win for us and for investors. This is part of our strategic long term approach to winning the approval of investors.
A large part of the deal was bought by Asians. Are Asian investors your key focus?
From IBK's perspective, whoever is our investor is important.
How does IBK seek to differentiate itself from other Korean policy banks such as KDB in the perception of investors?
There are three policy banks in Korea: KDB, Kexim and IBK. All play an important role. We play a different role because we focused on Korean SMEs and these are the foundation of the Korean economy. If you look at all companies in Korea, 99.7% are SMEs. Moreover we have the same support level from the government as KDB and Kexim but some parts of the market doesn't realize that. We are equal and the same in terms of government support to KDB and Kexim. But our SME focus makes us different.
Why is IBK not viewed on the same level as the others by investors?
There are two reasons . First, we are not in the market for as long, And even though we have the same level of support there are some in the market who believe that the level of government support is not the same. Second, S&P rates us lower than KDB. [IBK is rated A3 by Moodys and BBB+ by S&P]
Is S&P wrong?
We do not agree with their view. For seven years they have given us a one notch lower rating and for seven years we have disagreed. But still they rate us lower.
Should IBK price flat to KDB?
Yes, that is what I believe.
Is it a case of greater investor education about the IBK story?
Yes, and because of that we intend to meet with investors more.
What is the total borrowing requirement for the year?
About $2.5 billion. But a significant part of this will be financed locally.
What about yen? You have looked at yen financing thanks to the low interest rate and the strong correlation between yen and won. Will you borrow more in yen?
The fees are higher in the samurai market, and the all-in cost can be worse than dollars after swaps. And while in past yeats the correlation between yen and won has been high, it is not so great in the past. And we are bank so we need to prudent and conservative.