Banks to promote films, dramas

Korea’s major lenders are expanding their support for the content and entertainment industry, which has taken off with the popularity of hallyu worldwide.

The state-run Industrial Bank of Korea (IBK) plans to lend a total of 750 billion won during the 2014­2016 period to nurture the culture and content industry, which is seeking financial support.

“We have a long-term vision to nurture small- and medium-sized enterprises (SMEs) that produce excellent cultural content,” the IBK said in a statement Sunday.

“Our support will vary depending on the amount needed and the characteristics of the companies. We believe SMEs can grow into firms that are internationally competitive.”

Companies producing cultural content such as films, TV dramas and musicals have had difficulties borrowing from banks because of uncertainty in profits and general risks of the industry, according to the IBK.

The bank therefore set up a division to focus on lending to firms in the industry. It invested 541.7 billion won between 2011 and 2013 in a total of 3,040 cultural content productions and recorded a 2.2 percent in return last year.

Some of the movies it invested in were “Berlin File,” a film about conspiracies involving North and South Korean spies in the German capital. The IBK took some 29 percent of the film’s profit.

Two other state-run lenders ― Korea Development Bank (KDB) and Export-Import Bank of Korea (Korea EximBank) ― said they will also raise their investment in the culture and content industry.

Korea EximBank said it will invest 220 billion won this year, up from 205.3 billion won in 2013, 134 billion won in 2012, 209 billion won in 2011 and 114.1 billion won in 2010.

“Companies in the content industry require a stable supply of capital and know-how in financing when they go abroad,” the lender said. “It’s because the industry is not yet mature and has high risks.”

The company lent 7 billion won to the production of “The Nut Job,” an animated film jointly produced by Korean and Canadian production companies. The film was released worldwide and briefly rose to second place at the North American box office.

KDB said it purchased 15.2 billion won in stocks of 15 firms engaged in book publishing, mobile gaming and TV production, as of December last year.

It spent 24.5 billion won for the production of films including “New World,” “The Terror Live” and “Haewoondae”; musicals such as “Grease” and “The Three Musketeers”; and TV dramas.

Meanwhile, private banks are also strengthening their services for the culture and content industry.

KB Kookmin Bank has introduced an installment savings product for customers who are interested in movies. The accounts earn interest depending on how successful the films associated with the product are.

Customers can stay with the product for up to three years and receive annual interest that depends on how well the films do.

They receive an additional 0.3 percent in interest if the films are released two months before the customers’ contract with the product ends and attracts over 10 million viewers; 0.2 percent if the films draw over 5 million viewers; and 0.1 percent if the films draw over 3 million viewers.

“We believe our product will encourage more customers aged between 20 and 40 to watch films,” the bank said.

Last month, Woori Bank said its credit card arm, Woori Card, agreed to lend financial support to YG Entertainment, one of the largest show biz companies in the country.

YG manages a long list of well-known celebrities including hallyu stars Psy, 2NE1 and Big Bang. Woori Bank, Woori Card and YG Entertainment will also work together to develop financial products in line with the show biz giant’s businesses, which range from concerts to TV programs. By Yi Whan-woo The korea times