Among the Public Growth Fund, the bank that will be entrusted with the custody and management of 550 billion won in government finances will be selected at the end of this month. Because it can take charge of managing a large sum for 20 years, competition behind the scenes among commercial banks is reportedly intense.
According to the financial sector on the 10th, Korea Development Bank will finalize the custodian bank for managing the government finances of the Public Growth Fund on the 31st of this month. The custodian bank will manage 550 billion won of the government finances contributed to create the Public Growth Fund that will be used for direct investment and infrastructure investment and loan projects. When supporting corporations with the Public Growth Fund, the custodian bank settles the operating funds and also receives dividends and principal and interest.
Korea Development Bank will pay the custodian bank a fee equal to 0.011% of the entrusted asset, capped at 1.21 billion won per year. It is structured so that fee revenue increases every year. The custodian bank selected this time will sign a long-term contract and manage the funds for 20 years, through 2046.
Although commercial banks will not earn much fee revenue, they are highly interested in joining the project because of the symbolism of serving as the Public Growth Fund's custodian bank. The ability to attract a large amount of funds at once is also an advantage. Major commercial banks including KB Kookmin, Shinhan, Hana and Woori are all reportedly reviewing participation in the bidding. Korea Development Bank will accept proposals and bids from the banks on the 25th.
A commercial bank official said, "In addition to business viability, we are reviewing participation in the project from multiple angles, including improving external credibility."