Woori·Hana Bank and Mechanical Equipment Construction Mutual Aid Association 'Join Hands'... Support for Overseas Expansion Construction Companies (Comprehensive)

Hana Bank announced on the 8th that it signed a business agreement on "Joint Guarantee for Overseas Construction Projects" with the Mechanical Equipment Construction Mutual Aid Association at the Mechanical Equipment Construction Mutual Aid Association office in Cheongdam-dong, Seoul. Park Seung-oh, Vice President of Hana Bank's Credit Group (right), and Lee Yong-gyu, Chairman of the Mechanical Equipment Construction Mutual Aid Association, who attended the signing ceremony, are taking a commemorative photo.

[Asia Economy Reporter Kiho Sung] Banks have been partnering one after another with the Mechanical Equipment Construction Mutual Aid Association to facilitate smooth overseas construction contract acquisitions by domestic construction companies.

According to the financial sector on the 8th, Woori Bank and Hana Bank recently signed business agreements with the Mechanical Equipment Construction Mutual Aid Association, respectively.

Through this agreement, the two banks plan to provide financial support related to performance guarantees for overseas construction projects. Generally, when a construction company wins an overseas contract, the client requires a payment guarantee issued by a bank to ensure contract fulfillment. Consequently, construction companies bear high fees to obtain payment guarantees from local banks.

Previously, the method was indirect, where domestic banks reissued guarantees to overseas sites secured by the Mechanical Equipment Construction Mutual Aid Association's guarantee. However, with this agreement, the association will directly issue guarantees through SWIFT message dispatch to domestic banks' overseas branches and local subsidiaries, enabling faster and more simplified guarantee support.

Therefore, domestic construction companies expanding overseas can simplify the payment guarantee issuance process by utilizing the global networks of domestic banks and reduce guarantee fees by leveraging the creditworthiness of the Mechanical Equipment Construction Mutual Aid Association, to which the construction companies have contributed.

A Woori Bank official stated, “Following the existing agreement with the Construction Mutual Aid Association, the new agreement with the Mechanical Equipment Construction Mutual Aid Association enables us to provide financial support to construction companies facing difficulties in issuing payment guarantees for overseas construction projects. We will continue to support the smooth overseas investment and expansion of domestic construction companies.”

A Hana Bank credit planning section official said, “We will continue to cooperate with the Mechanical Equipment Construction Mutual Aid Association to actively support overseas construction projects related to ESG (Environmental, Social, and Governance), such as wind and tidal power generation. We will do our best to actively implement Hana Financial Group’s ESG management through various activities and support.”

The Mechanical Equipment Construction Mutual Aid Association, one of the three major construction-related mutual aid associations in Korea, was established in 1996 under the Construction Industry Basic Act and has 8,934 member companies. It provides financial services such as guarantees, loans, and mutual aid (insurance) necessary for the construction industry and launched direct guarantee services related to overseas guarantee projects in March.

This content was produced with the assistance of AI translation services.