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North Korean Woori Branch Faces Crunch as Cash Trucks Barred

April 09, 2013

North Korean Woori Branch Faces Crunch After Cash Trucks Barred

A North Korean teller answers questions at a Woori Bank business center in the Kaesong Industrial Complex in North Korea on Feb. 27, 2006. Photographer: Seokyong Lee/Bloomberg

Woori Finance Holdings Co. (053000), owner of the only South Korean bank with a branch in the North, said it expects its outlet at Gaeseong industrial complex to run out of cash “soon” amid rising military tensions.

The branch may need to interrupt service to South Korean businesses that require the cash to pay wages there, the Woori Bank unit said in an e-mailed response to questions today, declining to provide a timeframe. Four North Korean employees haven’t come to work, 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. North Korea said yesterday it will suspend operations indefinitely at Gaeseong, where more than 120 small businesses led by garment makers and textile companies operate.

Operations at the Gaeseong branch are continuing normally, and there hasn’t been an increase in the number of customers seeking to withdraw funds from their accounts, Woori Bank said.

Shares of Woori Finance, which is controlled by the South Korean government, climbed 0.8 percent to 11,950 won as of 12:47 p.m. on the Korea Exchange. That compared with the benchmark Kospi index’s 0.7 percent drop. Woori Bank is the nation’s second-largest by assets.

Gaeseong Workers

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 first 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

To contact the editor responsible for this story: Chitra Somayaji at

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