POSCO (POSCO Holdings, 005490.KS) is introducing a "supply chain finance" service with KB Kookmin Bank for customers within the steel business ecosystem. The company plans to ease financial risk and cost burdens for steel customers to secure funding liquidity and build a solid win-win cooperation model.
POSCO said on the 9th that it signed a supply chain finance memorandum of understanding (MOU) with KB Kookmin Bank at the POSCO Center in Seoul. The signing ceremony was attended by POSCO President Lee Hee-keun, KB Kookmin Bank President Lee Hwan-ju, and other officials from both companies.
Supply chain finance is a system that links companies participating in the supply chain, from product manufacturing to distribution, with financial institutions to enhance funding liquidity. It is also a win-win model that helps the fund circulation of customers who face difficulties in raising capital due to time gaps in payment collection or a lack of collateral.
The agreement connects POSCO, its customers, and the bank. Under the structure, the bank takes exclusive charge of collecting sales payments and provides financial and non-financial services to customers, including corporate loan support, environmental, social and governance (ESG) consulting, and various preferential benefits.
To this end, the two companies plan to launch a system within the year that directly links KB Kookmin Bank's loan program into the "My POSCO" platform. Once development is complete, customers will be able to handle everything from loan applications to execution in a one-stop manner within the platform after signing up for the product. POSCO expects that customers will receive industry-lowest preferential interest rates with minimized markup rates, and will benefit from securing liquidity and reducing financial costs amid a prolonged downturn in the steel market.
KB Kookmin Bank explained that it joined the agreement to lead in building a financial model that supports win-win cooperation across the steel industry supply chain, and to create business synergy through cross-selling such as deposits and currency exchange.
"This agreement goes beyond simple financial cooperation and marks an important milestone that elevates POSCO's unique 'win-win cooperation model' of growing together with customers to another level," President Lee said. "I hope this cooperation will be recorded as the most exemplary and representative win-win case created by Korea's manufacturing and financial industries joining hands."
Meanwhile, POSCO and KB Kookmin Bank plan to hold a joint briefing session for customers to explain the specific financial benefits and support programs.
