Korean bank boosts trade links with UAE

Korea Development Bank sets up its first office in Abu Dhabi, as lenders in South Korea and the UAE rush to ink deals with each other.

Song Sehoo, a 16-year-old winner of Korea's Got Talent, serenaded Emirati and Korean businessmen during yesterday's inauguration of the Korea Development Bank representative office in Abu Dhabi. RavinShow more

Korea Development Bank has established a foothold in Abu Dhabi, in the latest sign of the strengthening business links between the UAE and South Korea.

The Seoul-based lender, wholly owned by South Korea's government, inaugurated its Abu Dhabi representative office at a ceremony at Etihad Towers yesterday.

As Song Sehoo, a 16-year-old winner of Korea's Got Talent, serenaded a room packed with Emirati and Korean businessmen, a signing ceremony for the next deal was being prepared next door - a strategic alliance between Korea Exchange Bank and Dubai's Mashreq.

The rush to do deals between the two countries' banks underscores the growing importance of South Korea and the UAE place on their relationship, underscored by their cooperation on the Emirates' nuclear programme.

"The UAE and the Middle East have always been close to the heart of Korea," said Kim Han Chul, KDB's vice chairman and chief operating officer.

"Since as early as the '70s, Korean construction companies have worked hard in this region and built relations with the local community," he added.

These relationships were becoming stronger as the dynamism of South Korean companies sets them in search of new markets.

"Both the public and private sector in Korea are interested in expanding into the Mena region, starting with the UAE," he said.

The Middle East and North Africa accounts for more than half of Korea's overseas plant orders, said KDB.

The bank plans to use its representative office in Abu Dhabi to tap into further growth in the Mena region, with support for the Korea Cleantech Cluster project in Masdar City and Korean companies in the energy and healthcare industries.

KDB is attempting to transform itself into a global player as South Korea's overseas ambitions grow, with branch expansions in mainland China, Russia, Vietnam, Myanmar and Uzbekistan.

South Korea has attempted to build what it envisions as a "100-year" partnership with the UAE, built around its nuclear programme.

The UAE's four nuclear reactors will be built and managed by Korea Electric Power Corporation, also known as Kepco.

Lee Myung-Bak toured the site of the Emirates' first nuclear power plant in his final visit to the UAE as South Korea's president in November. South Korea has sought to emphasise that its relations with the UAE will not be affected by the result of its recent presidential election.

"As the UAE takes on a new global scale and has projected to lay the ground for future growth, Korea will be an important partner to help achieve that goal," said Kim Jung Hoon, the chairman of the South Korean National Policy Committee.

For their part, UAE banks have also sought to build ties with Korea's lenders.

Mashreq has also signed an agreement with Export-Import Bank of Korea (Eximbank) to support reciprocal investment between the two countries.

Abu Dhabi Commercial Bank followed in September last year by forming a partnership with Kookmin Bank, South Korea's largest lender.

National Bank of Abu Dhabi has also signed agreements with KDB and the Seoul International Financial Center to assist in its development.