RETAIL BANKING | Staff Reporter, Korea

South Korean banks to launch North Korean financial products

Kookmin Bank has unveiled a trust fund for families separated by the border.

South Korean banks are capitalising on warming ties with the North as they plan to roll out financial products especially tailored to new market gained in the inter-Korean reconciliation, reports Yonhap News Agency. 

Families forcibly separated during the Korean War in the 1950s were finally able to make tearful reunions as Seoul and Pyongyang stepped up efforts at reconciliation after the two Koreas held a historic summit in late April, adopting a joint declaration that works toward the complete denuclearisation of the Korean Peninsula.

In response to this growing market, KB Kookmin Bank has reportedly unveiled a trust fund for the separated families that would allow South Korean citizens to leave their money to their North Korean children or relatives upon their death. The lender is also actively looking for a North Korean affairs specialist who can help in preparing the bank's economic projects in Pyongyang. 

"We want to be prepared in advance as inter-Korean relations are improving fast," Lee Yoon-ki, a spokesperson for KB Kookmin told Nikkei Asian Review in an earlier interview. 

Nonghyup Bank is also eyeing the sale of a unification-themed fund.

Other banks are taking a more cautious approach with Shinhan Financial Group setting up a consultative body to discuss potential business opportunities in the North.

KEB Hana Bank is also said to be seeking the establishment of a task force which will study the politics, economics and society of North Korea whilst Woori Bank launched a task force on support for inter-Korean financial cooperation. The latter has also reportedly resumed discussions on reopening its branch in the now-shuttered industrial complex of Kaesong. 

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