Export-Import Bank of Korea (photo=Export-Import Bank of Korea)

 

[Alpha Biz=(Chicago) Reporter Paul Lee] The government will push for KRW 2 trillion worth of investment in the Export-Import Bank of Korea. It is to maximize the financial support capacity to expand defense exports. This is the first follow-up measure since the National Assembly passed a bill to increase the legal capital of the Export-Import Bank of Korea from KRW 15 trillion to KRW 25 trillion.

According to the government and the financial sector on the 25th, the Ministry of Strategy and Finance has decided to invest about 2 trillion won in the Export-Import Bank of Korea by investing shares in public corporations such as LH (Korea Land and Housing Corporation) in kind.

The government is pushing for investment to expand the Export-Import Bank of Korea's financial support for large-scale defense exports. If the capital is increased by about 2 trillion won, the Export-Import Bank of Korea will be able to supply an additional 14 trillion won in liquidity. The ratio of equity capital of the Bank for International Settlements (BIS) has risen slightly. As of the end of September last year, the BIS ratio of the Export-Import Bank of Korea was 14.8%.

In particular, the domestic defense industry's export contracts to Poland are expected to be bolstered. The Export-Import Bank of Korea exhausted most of its credit provision limits in 2022 when local defense companies signed their first export contracts worth $12.4 billion (about KRW 16.69 trillion) with Poland. This is why there have been concerns that it will not be easy to raise funds for the second round of 30 billion dollars (about 40.38 trillion won). If the investment is made this time, the Export-Import Bank of Korea is expected to use much of it to support defense exports.

Not only defense but also core industry export support such as semiconductor, secondary battery, and bio is expected to expand.

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