North Korean Woori Branch Faces Crunch as Cash Trucks Barred
Woori Finance Holdings Co., owner of the only South Korean bank with a branch in the North, said the outlet at Gaeseong industrial complex may run out of cash “soon” amid rising military tensions.
The branch may need to halt withdrawals by South Korean businesses that require cash to pay wages there, Woori Bank said in an e-mailed response to questions today, declining to provide a timeframe. Four North Korean employees of the bank didn’t come to work today, and one person who traveled south last week couldn’t return, leaving a staff of two, it said.
The lender hasn’t been allowed to send cash trucks carrying U.S. dollars and South Korean won to the branch since North Korea began barring entry into the jointly run industrial park from April 3. Kim Jong Un’s regime yesterday said it would suspend operations at Gaeseong, which hosts more than 120 small businesses led by garment makers and textile companies.
“We have reached a breaking point,” Han Jae Kwon, head of an association of South Korean businesses in Gaeseong, said in a televised press briefing today. “This suspension affects all businesses, so we can’t afford to dither.”
The companies may fail if steps aren’t immediately taken to resume work at the industrial complex, he said.
Woori Bank will provide 100 billion won ($88 million) in financial support to South Korean companies in the form of new loans with lower borrowing costs or by extending debt repayment periods, it said in a separate e-mailed statement today. The number of customers seeking to withdraw funds from their accounts at the Gaeseong branch hasn’t increased, the bank said.
Shares of Woori Finance, which is controlled by the South Korean government, climbed 0.8 percent to 11,950 won at the close of trading in Seoul. Woori Bank is the nation’s second-largest by assets.
Gaeseong is the last remaining example of inter-Korean cooperation, with about 53,000 North Koreans employed at the complex. From its opening in 2005 through Jan. 31, goods totaling more than $2 billion have been produced there, according to Unification Ministry data.
About 900 South Koreans regularly visit Gaeseong, located about 10 miles (16 kilometers) north of the demilitarized zone, the world’s most heavily fortified border.
The bank, which opened its branch in Gaeseong in December 2004, doesn’t provide loans at that outlet. It accepts deposits from its South Korean clients and transfers won and U.S. dollars to the branch in cash trucks. Woori Bank declined to comment on the schedule for the transfers or disclose other details about the trucks, citing security concerns.
The Gaeseong branch doesn’t engage in direct transactions with North Korean people, companies or organizations, the lender said today.
The bank plans to continue supporting its corporate clients there as long as the industrial park’s management committee allows them to do so and the businesses remain in the complex, Woori said in the e-mail.
To contact the reporter on this story: Seonjin Cha in Seoul at firstname.lastname@example.org
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