Archive for the ‘Koryo Bank’ Category

Koryo Bank unveils new debit card

Wednesday, October 12th, 2011

Dr. Bernhard Seliger of the Hanns Seidel Foundation writes in to notify us about the DPRK’s new Koryo Bank (고려은행) debit card.

Click image above to see the front and back of the card.

There is an information flyer available in the DPRK:

According to the translator this is what it says:

Electronic Paying Card (Debit Card)

1. Introduction
* Electronic Paying Card is a cash card with which cardholders can make a payment when buying a merchandise or receiving a service instead of money. We provide the very best customer service, convenience and security.
* Cardholders (including foreign cardholders) can freely make a payment in foreign currency at electronic paying card affiliates.

2. Instruction
*Issuing a card and making a deposit: Card is issued at Koryo card issuing branches. Foreign currency is converted into equivalent North Korean won at a current exchange rate (purchasing price) when cardholders or to-be make a deposit. Issuing a new card is free of charge. Issuing a card, cardholders should register a private password to prevent use of a third party. Using the card cardholders should remember the password to verify identity.

*Procedure of the payment: Card holders are allowed to purchase goods and services within the available balance of the account. Card payment machine verifies identity by crosschecking with the password you enter. If the information is confirmed to be correct upon identification, merchants or acquirers proceed to make the payment. After purchasing, the balance is diminished by the payment.

*Cash Withdrawal: Cardholders who want to withdraw a part or the entire of the remaining balance can be served at Koryo Bank Card issuing branches. The exchange rate is the current selling price.

3. Notice: Cardholders observe the followings as regards to using the card.
*Due to its delicate electronic procedure while the card is to be used, it is recommended not to damage the electronic part of the front.
*Remembering and entering the password correctly is important, since the payment procedure is suspended after 3 times of password errors.
*If the card is destroyed or lost, cardholders should go to the Koryo bank where the card is issued and report the loss and the damage.
*With verifying identity and the balance of the card, a new card is issued.
*Cardholders shall remain liable for the loss incurred by their negligence.

4. Questions and hot line
*When there is a question, a loss, duplication or a lost electronic paying card, Call 462-6315.

Koryo Bank

This is not the only debit card available to foreigners in the DPRK. Dr. Seliger also wrote in earlier this year to inform us of the DPRK’s Narae (나래) debit card.

Here are previous posts on Koryo Bank.


Banking steps towards the real world

Monday, December 12th, 2005

FDI Magazine
Stephen Timewell

On my journey to Pyongyang a Beijing receptionist remarked that the Democratic People’s Republic of Korea (DPRK) is very much like China was 25 years ago. And as the motorcade of China’s president Hu Jintao passed thousands of flower-waving North Koreans on his visit to the world’s most secretive and politically isolated country at the end of October, he may well have agreed.

Visiting Pyongyang is like going back decades in a time machine, to a land with no advertising, no Nokia, Microsoft or McDonald’s billboards and almost no cars. Impressive grand avenues and massive public monuments dominate the landscape but there is no new construction or shops.

The streets are scrubbed clean by hand and are full of hundreds of orderly people wearing their ‘Great Leader’ badges and walking everywhere. Curiously, bicycles are discouraged because of bad accidents and the government encourages power walking for good health, or so I am told. In a country said to spend 30% of its GDP on defence, there is no visual military presence (or overt police presence) in the capital at all.

The ‘traffic ladies’ standing at major intersections are a welcome replacement for traffic lights but there are precious few cars to direct.

Questions greatly outnumber answers in this capital where visitors are duly dazzled by the spectacular grand mass gymnastics and artistic performance (called Arirang) by almost 70,000 children in the massive 150,000-seat May Day Stadium. But visitors are also aware of serious food shortages and cannot ignore the capital’s tallest building, a magnificent 105-floor pyramid tower with a crane on top, left unfinished many years ago, I was informed, due to financial problems.

Winds of change

Whether the DPRK is seen as the last Stalinist communist state or as a Confucian nationalist monarchy or even, as it describes itself, as a “powerful socialist nation”, visitors can feel the winds of change, particularly on the economic front. For more than 50 years the iconic stature of the late ‘Great Leader’ Kim Il Sung and that of his successor son Kim Jong Il have dominated the political landscape; the question going forward is how the country’s dire economic circumstances can be improved and whether the regime has the capability to create the new structures needed.

Pyongyang was playing host not only to Mr Hu but also to an increasing number of foreign delegations and journalists, all keen to understand the trends taking place in probably the last country to have massive pictures of Marx and Lenin hanging outside its Ministry of Trade. For many, however, the current focus is progress in the Six-Party Talks on the nuclear weapons programmes of the DPRK.

In the fourth round of talks in September between the two Koreas, China, Japan, Russia and the US a landmark agreement appeared to have been reached. “All six parties emphasised that to realise the inspectable non-nuclearisation of the Korean Peninsula is the target of the Six-Party Talks,” a joint statement said. “The DPRK promised to drop all nuclear weapons and current nuclear programmes and to get back to the non-proliferation treaty as soon as possible and to accept inspections from the International Atomic Energy Agency.”

At the time of going to press in November a fifth round of talks was expected to move a final agreement closer but detailed negotiations over implementation of the above agreement were not expected to be easy or to be concluded quickly. The DPRK, unsurprisingly, wants some payback, be it light-water reactors from the US or other economic incentives.

The core issue is that the DPRK’s publicly acknowledged plutonium programme, believed to provide enough radioactive material for about six bombs, is probably also the country’s key card in trying to rebuild the economy. Kim Jong Il needs to gain maximum advantage from giving up his nuclear threat, but even then, what does his economy have to offer?

Information hollow

For a financial journalist the DPRK represents a serious challenge. Understanding the economy and the banking sector of a country is never easy, but when no data is published by the government or the central bank it becomes significantly more difficult. I knew information was scarce but believed that the two very agreeable government minders, assigned to monitor my every move in my four-day visit, would be able to help me extract a simple list of banks operating in the country. No such luck. Although my visit was welcomed, the central bank (which acts as both the issuing bank and as a fully operational commercial bank in the traditional socialist model) failed to provide the list (or anything else), despite numerous requests.

Although the consensus after several interviews was that around 20 banks of various types exist, I can only vouch for the handful listed here. Clearly the Foreign Trade Bank (FTB) represents a pivotal bank in the financial system and Ko Chol Man, director of the FTB, was keen to explain the peculiarities of the DPRK banking system. “The domestic and foreign exchange settlement systems are completely separate. The central bank deals with the domestic market and money issuance and it also has a commercial banking role; the FTB has complete control over foreign exchange matters and trade and also holds the country’s foreign exchange reserves.”

Unlike other banking systems, the FTB in the DPRK acts as a clearing house for the foreign exchange activities of the banks in the country. It does not report to the central bank but, like all banks, reports to the State Fiscal and Financial Committee (SFFC), the overall banking regulator.

Mr Ko was pleased to note that the FTB had around 500 correspondent banks worldwide and, along with its 600 staff (including 11 branches) in North Korea, had six representative offices outside the country (including offices in Austria, Russia and China) and planned to establish a UK representative office in London. However, when asked for details of FTB’s banking activities he replied bluntly that no banking institution had published its figures in terms of activities or balance sheet. “We cannot give figures about the size of our assets because it is a regulation of the state. If the situation becomes better we can make them public but up to now it is impossible.”

Economic estimates

Despite the absence of official economic and banking data, various estimates help make the picture a little less murky. A recent Standard Chartered Bank report places North Korea’s nominal GDP at the end of 2004 at $22bn or $957 in GDP per capita terms for the country’s 23 million population; by comparison, South Korea’s nominal GDP is put at $680bn or $14,167 per capita for its 48 million population. While the unification of the two Koreas is seen as an important political objective, especially in Pyongyang, the startling economic gap between the two states could mean that the North becomes a huge burden on the South, and Seoul well recognises the economic problems that emerged from the reunification of Germany in the 1990s.

Meanwhile, Jong Msong Pil, of the Institute of Economy at the Academy of Social Science, explained how the economy had declined dramatically from a GDP per capita of $2500 in the mid-1980s to $480 per capita in 2000.

“The big drop was caused by the disappearance of the socialist market worldwide in the early 1990s; the collapse of our socialist barter trade system led to the failure of many enterprises and a decline in living standards,” he said.

Dr Jong noted that, following the hard times of the mid-1990s, the first target of the national economy has been self-reliance. He added that no economic data had been published since 2000. He believed, however, that 10% economic growth occurred in 2004 and, responding to reports from the World Food Programme (WFP) that a third of the population were malnourished, he said the food situation was improving. “In our country, all people have a job so for this reason no one has died of starvation or hunger. Our country is a socialist planned economy so the government takes care of people’s living.”

Acknowledging shortages in the past, Dr Jong said that in October the government had normalised the public food distribution system, which indicated the government was now supplying sufficient food.

Is the DPRK’s food crisis over? Driving around Pyongyang’s spacious avenues (with two minders) there was no visual evidence of malnutrition – but the capital is likely to be much better served than elsewhere. A supermarket was shown but the goods were only available for foreign currency, hardly food for the masses. Cha Yong Sik, deputy director general at the Ministry of Foreign Trade, said the government had not imported food on a commercial basis in 2005, unlike previous years, but neighbouring countries are still providing significant food aid. Richard Ragan, country director of the WFP, said food production in 2005 was up 10%, with cereals up 6.6%. But while the food situation may have improved, the DPRK is said to be still dependent on food aid.

Trade predictions

So what are the DPRK’s prospects? Much depends on the outcome of the nuclear negotiations but estimates from the Seoul-based Korea Trade-Investment Promotion Agency (KOTRA) say the DPRK’s trade volume in 2005 is expected to pass $3bn for the first time since the fall of the Soviet Union with the figure likely to reach $4bn if inter-Korean trade is included. Trade with China, the DPRK’s largest trading partner, grew by more than 40% in the first half of 2005, indicating Pyongyang’s growing dependency on Beijing.

Upbeat on trade prospects, Mr Cha explained that the recently opened Tae-an Friendship Glass Factory, built with a $32m donation from the Chinese government, would export 40% of its 300-ton capacity, mainly to Siberia. Also Pyongyang’s first autumn international trade exhibition in October included companies from six European countries, the focus being on the country’s mineral potential rather than its manufacturing abilities, which are a long way off.

As for banks, the group of up to 15 joint venture banks are helping to finance the country’s 150 or so international companies. But do not expect miracles. The latest, Koryo Global Credit Bank, set up in June, is a joint venture between the UK-based Global Group, headed by Hong Kong businessman Johnny Hon, with 70%, and the state-owned Koryo Bank with 30%. Established with a paid-up capital of e10m, KGC Bank is ambitious in its plans to engage the DPRK in trade and commercial relations with the rest of the world, especially Asia, the Middle East and Europe.

KGCB’s first correspondent banking relationship in Europe is with Germany’s Helababank. The bank, the first product of cooperation in the finance field between the DPRK and the UK, has a staff of five and is also interested in investing in property. It was also able to produce, at the instigation of US authorities, a comprehensive anti-money laundering file.

Another local venture is North East Asia Bank (NEAB), which was set up by ING Group in 1995 but is now wholly owned by the Korean BOHOM Group. Amazingly, Kim Hyon Il, NEAB’s president, produced a balance sheet showing total assets of e79m at the end of 2004 and a paid-up capital of e25m. He also showed me the bank’s newest product, a chip-based cash/debit card, the first in the DPRK. The card demonstrates perhaps that the country is slowly joining the real world – but with only 100 issued and only 13 outlets available, the service has a long way to go.

Political effects
At Daedong Credit Bank, chief executive Nigel Cowie explained how international politics can have a dramatic impact on banking even in the isolated DPRK. In September, just before the conclusion of the fourth round of the Six-Party Talks, the US Treasury accused Banco Delta Asia (BDA), a Macao-based bank, of aiding the DPRK in a series of ‘money laundering’ cases. The Wall Street Journal had said the Macao crackdown was Washington’s method of cutting off Pyongyang’s financial sources for its nuclear weapons programme.

Mr Cowie, a former HSBC banker, explained that all DPRK banks had accounts with BDA for the purposes of remitting funds and, as a result, the accounts were suspended pending an inquiry in mid-November. While Stanley Au, chairman of BDA’s parent, denied the US allegations and BDA’s involvement in any illegal business relations with DPRK banks, the damage is done. “It affects our customers because it affects people’s ability to remit money to and from the country. I imagine that this will cause people doing legitimate business to give up,” says Mr Cowie.

The nuclear negotiations remain critical to the country’s future and the Chinese, in particular, want them to succeed. But that is just a start. There is evidence that the DPRK is opening up and changing with reports that there are 300 open markets operating across the country, 30 in Pyongyang. But whether the DPRK follows the China model of 25 years ago and can restructure its ‘powerful socialist nation’ doctrine remains doubtful under the current leadership.


Psychiatrist with a head for business

Saturday, December 3rd, 2005

Asia Times
Michael Rank

From psychiatrist to international banker and gambling tycoon is an unusual career path, but Hong Kong-born Dr Johnny Hon says it makes quite a lot of sense. “Wealthy clients need a psychiatrist more than they need a banker,” he quipped. “Training in psychiatry makes you understand clients better. Most of them are elderly. They are concerned about their health and how to plan for passing their wealth down to their children.”

Hon, 34, was awarded a PhD in psychiatry from Cambridge University in 1998, but left medicine for finance after being recruited by the Dutch bank ABN AMRO as a private banker in Hong Kong. He didn’t stay with the Amsterdam-based bank long, however, and now has his own business empire, Global Group (Europe) plc, stretching from a joint venture bank in North Korea to a stake in a lottery in China, not to mention another bank in the Comoro Islands off Madagascar and an online gambling company in London.

Hon’s business ventures tend towards the exotic, but in an interview at his headquarters in London’s Docklands financial district he came across as measured and affable – even if I never did quite understand how he switched from a dissertation on the association between Down’s Sydrome and Alzheimer’s disease to international finance.

This has been a big year for Hon, who in June opened the Koryo Global Credit Bank in Pyongyang and in July announced the signing of a contract to co-manage the state sports lottery in the southwestern Chinese province of Guizhou.

Under the deal with Guizhou, Hon’s UK company, Betex, became the first non-Chinese company to become involved in gambling operations in mainland China (although numerous overseas gaming firms are involved in the Macau SAR). Gambling is illegal in China, with the big and fast-growing exception of state-sponsored lotteries, currently worth US$4.8 billion a year, although illegal gaming expenditures are estimated at 10 to 15 times as much, according to a recent Deutsche Bank report.

The Chinese government is aiming to cash in on the huge illegal gaming market through a vast network of video lottery terminals, and Deutsche Bank says “these measures will help lottery capture 40-50% of the illegal gambling market over the next three years”. Hon said his company had invested about 1.75 million British pounds ($3.05 million) in Guizhou, where there were currently 780 lottery sales points. These will be upgraded to give results in real time rather than be downloaded twice a day.

“So far we are involved only in Guizhou,” one of China’s poorest provinces, he said. “But we will hopefully speak to more provinces. Gaming in China has a lot of potential.” Underlining this potential, Deutsche Bank has cited the Peking University Center for Lottery Research as valuing illegal gambling activities in China – including underground casinos, slot machines, black market sports betting, and illicit lotteries – at around $75 billion. State lotteries are supposed to hand a proportion of their profits to charity and to sports development bodies, but corruption is said to be rife.

Hon said he was “taking a cautious approach” with his bank in North Korea, in which Global Group has a 70% stake and state-owned Koryo Bank has 30%. Stalinist North Korea is notoriously closed and secretive, but Hon said up to 200 foreign business people lived in Pyongyang and the country was gradually developing a market economy. He said he was “very bullish” about the future of North-South Korean economic cooperation, and stressed the potential of the Kaesong industrial zone, where a large number of South Korean companies have opened factories.

Hon noted that China’s economic reforms had been greatly boosted by overseas Chinese entrepreneurs from Hong Kong and Taiwan, who have cultural, linguistic and family ties with the mainland, and South Koreans and overseas Koreans could make a similar contribution to North Korea’s economic development.

“I keep telling my North Korean friends to make use of the huge resources and capital from South Korea,” Hon said. “Labor costs are even cheaper than China … People are well educated and have good discipline. They need the right economic policies.” Regarding North Korea’s relations with the West, Hon said: “There have been a lot of misunderstandings on both sides … There is a big gap in how they read the West and how we read them.”

Hon noted that Macau billionaire, Stanley Ho, had a casino in Pyongyang, and said that “maybe I will talk to him a bit about banking arrangements”. But he denied that he had any involvement with North Korea’s reported online lottery venture, which is aimed mainly at South Koreans. North Korea is highly puritanical and its citizens are barred from the Pyongyang casino, whose main customers are Chinese entrepreneurs and tourists.

Hon said he was motivated not simply by money, but also wanted to “make positive contributions” to impoverished Third World countries. “I came to the conclusion that you can do more good to help more people by making money first,” he added.

This was part of the reason why he founded a bank on the tiny, impoverished island of Anjouan in the Comoros in 2002. The Comoros, in which Anjouan has autonomous status, have endured 19 coups or attempted coups since gaining independence from France in 1975, and Hon wryly admitted that “at the moment the bank has caused me more problems than it is worth”. He founded the bank after he was “asked to help” by the president of Anjouan to assist in drafting new financial laws and setting up an offshore banking industry on the Indian Ocean island.

Global says it is the only company authorized by the government of Anjouan to market financial and banking licenses. But the company says some websites allege that this is not the case and that Global is challenging this in the courts.

Hon, a British citizen, was educated in Britain from the age of 13 and says on his website that in just six years he “has built up a mini conglomerate, with interests in banking, property development, gaming, finance and leisure and from which the combined turnover in 2005 is expected to reach well in excess of 1 billion British pounds. Even more remarkable is that whilst building the Global Group of Companies from scratch, he has managed to pursue so many other interests both charitable and political.”

On the charitable side, Hon was part of a team that provided North Korea with 120 wheelchairs after a large explosion on a railway line last year in which 169 people died. There was speculation, strongly denied by the North Korean government, that the explosion was a failed assassination attempt against the country’s all-powerful leader, Kim Jong-il.

On the political side, Hon is a business supporter of Britain’s governing Labour Party, and a signed photograph of Prime Minister Tony Blair “to Johnny and all at Global” is on prominent display in the company’s boardroom. In Britain, his gaming company, Betex, is seeking a listing on the Alternative Investment Market, which has a more flexible regime than the main stock exchange, while Hon is also actively seeking business partners for tourism ventures in the Caribbean. Hon said he employs 115 people worldwide, mainly in Britain but including about 10 in China and seven in North Korea.

His other interests include helping Chinese companies get a stock market listing in London. These companies span a wide range of sectors, from biotechnology to education and tourism. On his website he lists some 30 companies of which he is founder or director, and states that Global Group “is growing at a rapid rate, employing more and more staff and operating in more diverse areas than ever before. Under Johnny’s chairmanship the group is certain to go onwards and upwards.”

Hon definitely seems like a man to watch, and you never know in which exotic corner of the world he is going to turn up next.


North Korean Financial Institutions (loads of info)

Tuesday, March 5th, 2002

From our friends at the U.S. Embassy in Seoul:

North Korean financial institutions
U.S. Embassy; Seoul, South Korea
Flash Fax Document Number: 5711
Date: April, 1995

1. This cable summarizes information obtained from meetings with Korean Development Institute (KDI) officials as well as from two unclassified publications:
— “Status of North Korea’s financial system and expected reform in North Korea’s financial world in case economic integration takes place,” written by Dr. Chun Hong-Taek, and published by KDI in January 1994. Chun notes that his information is from open sources as well as interviews with South Korean companies that have done business with North Korea.

— “North Korean trading companies and financial institutions,” published by the National Unification Board (NUB) in October 1994. The NUB notes that the data in its publication is based on contract forms between South and North Korean trading corporations and other open sources, such as “Foreign trade of the DPRK” (published by the DPRK International Trade Promotion Committee, editions of January 1993 to June 1994) and “Directory of DPRK Foreign Trade Organizations,” (published in March 1994 by Japan’s East Asian Trade Society).

2. A few observations about the information:

— It provides a snapshot of individual North Korean financial institutions, such as a bank’s areas of specialization (if any), its address, key personnel, and its correspondent banks overseas. It does not provide information on current financial transactions.

— There are some differences in the information provided by the KDI and NUB, especially regarding subordination/jurisdiction. For example, the KDI publication notes that all banks are subordinate to the Central Bank, which itself is subordinate to the State Administration Council (SAC). The NUB, however, indicates that some banks are directly responsible to the Central Bank, while others are responsible to the SAC.

— Neither the KDI nor NUB publication lists any North Korean financial institution as having a correspondent agreement with Ashikaga Bank in Japan — a relationship that has been discussed in the press.

— Because of the date of information, newly created banks, such as the Ing-North East Asia Bank (reftel), are not included below.

— Likewise, the KDI and NUB include the names of several banks that may not be currently operating (such as Lyongaksan Bank), may have merged, or may have been renamed. 3. According to KDI officials and the two documents mentioned above, North Korean financial institutions include:

The Central Bank
4. Its title in English is the “Central Bank of the Democratic People’s Republic of Korea.” The CB is located In the central district of Pyongyang. Its telegraphic address is central bank. The CB operates 227 branches throughout North Korea, including P’yongyang, Ch’ongjin, Haeju, Hamhung, Hyesan, Kaesong, Kanggye, Namp’o, Najin, Sariwon, Sinuiju, and Wonsan. According to NUB, CB’s President is Chong Song-t’aek.

5. Established in 1946, the CB falls under the jurisdiction of the State Administration Council. Organizationally, the CB consists of three departments (Cadre Affairs, Material Supply, and Finance) and 14 Offices (coordination/planning, floating fund, Construction fund, repair fund, technology, currency control, banknote issue, fixed assets, savings/insurance, bookkeeping, inspection, business, and mobilization).

6. As a central bank, it is responsible for issuing bank notes, regulating currency in circulation, handling matters related to payment of accounts on a national level, making the government’s budgetary payments, and purchasing/managing precious metals. The Central Bank also operates as: a “special bank” by supplying state funds; a “commercial bank” by accepting deposits and lending money; a “state auditor” by exercising financial control in matters regarding the use of state funds; a “state property manager” by registering and evaluating the fixed assets of state institutions and enterprises; and as an “insurance institution” by handling domestic insurance matters–including property insurance for cooperative farms and factories and accident insurance for working Persons between 16 and 65 years old.

7. (FYI: according to KDI, there are four kinds of savings accounts available at the CB and north Korean Post Offices: ordinary savings accounts carrying 3.0 percent interest per year; long-term savings accounts carrying 3.6 percent interest per year; time deposit accounts carrying 4.0 percent interest per year; and a lottery-type deposit whereby the subscriber-if he/she draws a winning number in a lottery held every quarter–is paid a prize instead of interest.)

8. Funds lent by the CB to North Korean enterprises come from three sources, including the state budget, savings accounts, and insurance premiums. If an enterprise suffers a temporary cash flow problem while implementing Its projected economic plan, it can go to the CB because — according to KDI — the CB is the only supplier of state budgetary funds and money needed for financing national economic plans comes out of the state budget.

9. The NUB publication lists a firm named “Eunbyol Corporation of the Central Bank of the Democratic People’s Republic of Korea.” It is located in the central district of P’yongyang, its telex number is 5965 zu kp, and its telephone numbers are 33946 and 36882. According to the NUB, Eunbyol accepts orders for the manufacture of memorial coins. (Comment: The relationship between Eunbyol and the Central Bank is not further defined.)

Trade Bank (aka Korea Trade Bank)
10. The Korea Trade Bank’s (KTB) title in English is the “Foreign Trade Bank of the Democratic People’s Republic of Korea.” The bank is located in the central district of P’yongyang. Its telegraphic address is Mooyokbank Pyongyang; its telephone numbers are 32588, 34531, and 36508; its telex is 5460, 5465, 5477 and 36032 muyok bk kp; and its fax number is 814467. KTB’s president is Kim Ung-ch’ol, and its vice presidents are Kim Chun-ch’ol, Kim Myong-po, Pak Yang-sok, and Kim Yun-sik.

11. KTB was established in November 1959. The bank comes under the Central Bank’s jurisdiction, although KDI officials believe that the bank is now operating with less Central Bank oversight. According to KDI — KTB actually functions like a central bank’s foreign exchange department because its responsibilities include settling accounts in trade and invisible transactions, exercising control in matters regarding foreign exchange acquisition and disbursement, setting and announcing foreign exchange rates, and issuing foreign exchange convertible notes that can be used only by foreigners while staying in north Korea. According to NUB, KTB was once involved in trade with South Korea, such as selling gold and silver nuggets.

12. In order to settle its trade accounts overseas, KTB has correspondent agreements with foreign banks, including 18 banks in Japan, which (as of March 1993) the NUB identified as Sanwa, Tokyo, Sakura, Mitsubishi, Fuji, Daiichi-kangyo, Tokai, Sumitomo, Asahi, Saiwa, Hokkaido Takushoku, Nihon Kogyo, Nihon Long-term Credit Bank, Itsui Trust, Sokuri, Hyogo, Hokkuriku, and Norin Chuou Kinko. According to KDI, other foreign banks include Great Britain’s Lloyds and Standard Chartered, Germany’s Deutsche and Commerze, France’s BNP and Credit lyonnaise, Switzerland’s SBC and UBS, Austria’s Creditanstalt Bankverein and Girozentrale Vienna. KTB also has correspondent agreements with unidentified banks in Hong Kong.

Daesong Bank
13. This bank’s title in English is “Korea Daesong Bank” (KDB. It is located in the central district of P’yongyang. Its telegraphic address is Daesongbank Pyongyang; its telephone number is 43002; and its telex is 36023 and 37041 kdb kp. According to the NUB, KDB’s President is Kim Myong-hui, its vice president is Chang Kon-il, and its chief managing director is Ch’oe Su-kil. (comment: according to KDI, the KDB’s top managers traditionally hold high posts within the KWP, and these persons are typically more influential than other government officials.)

14. Established in November 1978, KDP comes under the Central Bank’s jurisdiction. The bank settles accounts for trading and shipping companies, such as Korea Daesong Trading Corporation, Korea Tonghae Shipping Company, and Korea Mangyong Trading Corporation. The bank was also once involved in trade with South Korea, such as selling gold and silver nuggets

15. (Comment: the KDI and NUB publications say that KDB is under the Central Bank’s jurisdiction, but the NUB write-up on Korea Daesong General Trading Corporation (KDGTC) notes that KDGTC operates a bank, most likely referring to Korea Daesong bank. Moreover, the NUB says That kdgtc itself is under the jurisdiction of the Daesong General Bureau, Office 39, KWP Central Committee.)

16. KDB operates a branch/affiliate in Vienna, Austria, named the Golden Star Bank. It also operates a branch of the Korea Daesong Trading Corporation in Hong Kong, according to KDI. In addition, KDB has correspondent relations with banks in Japan (Tokyo, Sanwa, and Sokuri), In the United Kingdom (Midland, National Westminister, and Standard Chartered), in Germany (Deutsche Bank) and in Switzerland (Swiss Bancorp). It also has correspondent relations with unidentified banks in Bombay, Frankfurt, Hong Kong, London, Paris, Singapore, Stockholm, and Vienna.

Changgwang Credit Bank
17. Its title in English is “Korea Changgwang Credit Bank” (KCCB). The bank is located in P’yongyang. Its telegraphic address is Changgwang credit; its telephone number is 31477; its telex is 36016 kccbc kp; and its fax number is 814414. According to NUB, the chairman of Korea Changgwang Credit Bank (KCCB) is Sin Ho and its president is Maeng Pok-sik.

18. According to NUB, KCCB was established on 25 February 1983 and deals in international financing – making exchange transactions in Beijing, Copenhagen, Frankfurt, Geneva, Hong Kong, London, Milan, Rome, Singapore, Stockholm, Tokyo, and Vienna. KCCBC also has 172 branches. (Comment: the NUB publication does not specify whether these branches are located in North Korea or overseas.)

19. (Comment: Although KDI’s banking document does not contain any details on KCCB or its activities, a KDI official told Emboffs that he considers KCCB to be the richest bank operating in North Korea — primarily because it is associated with the military (NFI).)

Koryo Commercial Bank
20. The bank’s title in English is “Koryo Commercial Bank Ltd.” This bank is located in Taedonggang District, P’yongyang. Its telegraphic address is Koryo bank; its telephone number is 32060; its telex is 36019 kcb kp; and its fax number is 814441. According to NUB, the bank was established in 1988, jointly financed by the DPRK and a Group of Korean residents in the United States. Its business reportedly is to issue “National Reunification Fund” bonds.

Credit Bank
21. The Credit Bank’s title in English is “Credit Bank Of Korea.” It is located in the Taedonggang District of P’yongyang. Its telegraphic address is credit bank; its telephone number is 814285; its telex is 5939 cbk kp; and its fax number is 817806. The president of Credit Bank is Pak Ki-chu.

22. Credit Bank was first established in September 1986. It was initially called the International Credit Bank, but its name was changed to its present form on 23 August 1989. Dealing in international finance, the Credit Bank does exchange transactions in cities around the world, including Amsterdam, Brussels, Frankfurt, Hong Kong, London, Milan, Moscow, New York, Paris, Tokyo, Vienna, and Zurich. The Credit Bank also was once Involved in trade with South Korea, selling gold nuggets to it.

Kumgang Bank
23. Kumgang bank is located in the central district, P’yongyang. Its telegraphic address is Kumgang Pyongyang; Its telephone numbers are 32029 and 32797; its telex is 5355 kgbk kp. Kumgang Bank settles accounts for export-import transactions of North Korean trading corporations, including Korea Pyongyang Trading Corporation and Korea Ponghwa General Trading Corporation.

24. According to the NUB, Kumgang bank was established in September 1978. Its subordination is not clear as the NUB says it is under the state administration council’s jurisdiction, while KDI says it is under the Central Bank’s. (Comment: to further complicate the issue, the NUB document notes in its write-up of Korea Ponghwa General Corporation (SEPTEL) that Ponghwa itself operates the Kumgang Bank.)

Nagwon Financial Joint Venture Corporation
25. According to the NUB publication, Nagwon was established in October 1987, jointly financed by Korea Nagwon Trading Corporation and a Japanese firm “Palace.” Its subordination is not clear as NUB says it is under the State Administration Council jurisdiction, while KDI says it is under the Central Bank’s. The bank accepts deposits, remits money, and provides financial services to joint venture projects, trading corporations, and companies run by overseas compatriots.

26. (Comment: The KDI publication does not provide information on this firm. Instead, it notes that a bank named Korea Ragwon Kumyung Company (aka Korea Ragwon Financing Company) operates in North Korea, but information on its activities is not available. It is not clear whether the NUB and the KDI firms are one and the same.)

Yongaksan Bank (aka Lyongaksan Bank)
27. This bank was established in February 1983. It settles trade accounts of trading companies, including Yongaksan Trading Corporation.

T’ongil Palchon Bank (aka Korea Tongil Paljon Bank)
28. (Comment: T’ongil Palchon means “reunification and development.” Based on the information below, this bank is probably the same as “United Development Bank” which was formed in November 1991 between Ruby Holdings (now known as China Strategic Investments) and Osandok General Trading Corporation.)

29. According to NUB and KDI, T’ongil Palchon Bank (TPB) is a joint venture between Hong Kong’s Ruby Holdings Company and North Korea’s Osandok General Bureau. The two publications differ regarding the bank’s financing and subordination: –NUB says that TPB was jointly financed; KDI indicates that Ruby Holdings financed 51 percent of TPB’s US $30 million capital, with Osandok financing the remaining 49 percent. (Comment: According to the KDI publication, China’s International Trust and Investment Corporation (CITIC) had an option to buy into the joint venture, but it is not clear whether CITIC ever did so.)

— The NUB says TPB falls under the State Administration Council’s jurisdiction; KDI says TPB is subordinate to the Central Bank.

30. According to KDI, TPB deals in general trade, including the import of advanced technologies (NFI). It also operates an affiliate, Korea International Trust Investment Corporation (KITIC). KDI notes that North Korea appears interested in learning market financing techniques because the holding company of the joint venture partner (Ruby Holdings) is Indonesia’s Sinarmas (phonetic) Business Group which owns the Bank International Indonesia. (Comment: KDI defines “financing techniques” as ones required for inducing foreign capital.)

Habyong Bank
31. Habyong Bank’s title in English is “Korea Joint Venture Bank” (KJVB). It is located in the Central District, P’yongyang. KJVB’s telephone numbers are 33052 and 39620; its telex is 36001 kjb kp; and its fax number is 814497. The bank’s vice president is Pak Il-nak, who the NUB document says is from the Chosen Soren.

32. KJVB was established in April 1989. The NUB and the KDI publications differ on the names of the joint venture partners:

— The NUB says that the bank was formed by the Chosen Soren and its affiliate, the Federation of Korean Traders and Industrialists in Japan. The North Korean partner is the State Administration Council’s Joint Venture Industry General Bureau.

— KDI notes that KJVB was jointly financed by the Chosen Soren’s Joint Ventures Promotion Committee and North Korea’s Korea International Joint Venture Company.

33. The bank functions as an international financial institution, providing financial assistance for North Korea’s joint venture projects and settling domestic and foreign accounts for joint venture companies. According to NUB, the bank also conducts economic surveys. KJVB operates branches in North Korea, including Hamhung, Sariwon, Sinuiju, Wonsan, P’yongsong, and Ch’ongjin. It also has correspondent relationships with some 30 foreign banks, including Japan’s Sokuri Bank, Hong Kong’s Maritime Commercial Bank, and China’s Bank of China.

Kukche Insurance Company
34. This firm’s title in English is “Korea Foreign Insurance Company” (KFIC). It is located in P’yongch’on District in P’yongyang. Its telegraphic address is chosunbohom; its telephone numbers are 36147, 38805, and 45501; and its telex number is 5464 bohom kp. KFIC’s president is Paek Myong-non, and its vice presidents are Yi Sang-chu and Pak Kun-pae.

35. According to NUB, KFIC handles insurance matters involving ships and export-import cargos and reinsurance issues involving foreign insurance companies. It also does business with some non-life insurance companies in Japan regarding reinsurance matters. KFIC operates branches at major ports, including Namp’o, Hungnam, Ch’ongjin, Najin, and Haeju.