Eight Large Companies With State-Run Bank Stakes Trail Competitors' Growth... Limits of Government-Directed Finance

Analysis of eight large companies in which KDB and the Export-Import Bank hold stakes
Revenue fell 15.3% over five years, while competitors' revenue rose 42.8%
KAI recorded the lowest revenue growth despite a defense boom

The growth of eight large companies in which state-run banks hold stakes or have been involved in management has lagged far behind that of their industry peers. Over the past five years, the companies’ revenue fell by an average of 15.3%, while that of their competitors rose by 42.8%. Korea Aerospace Industries (KAI), in particular, has fallen behind competitors in revenue, operating profit and production capacity despite a boom in the defense industry. The Export-Import Bank of Korea has been its largest shareholder for about 10 years.

The findings came from a comparison by corporate analysis institute Leaders Index of the performance of eight large companies in which the Korea Development Bank and the Export-Import Bank of Korea hold or previously held stakes, and that of their competitors. The analysis was based on data from the Financial Supervisory Service’s Data Analysis, Retrieval and Transfer System (DART) and the Korea Exchange’s KRX Information Data System.

The companies analyzed were Korea Aerospace Industries, HMM, Hanwha Ocean, Daewoo Engineering & Construction, Kumho Tire, Asiana Airlines, HSG Sungdong Shipbuilding and K Shipbuilding. Although the analysis periods varied by company, all eight recorded lower revenue growth than the average for their industry peers. Their average operating profit growth was also 26.8%, far below the competitors’ average of 149.2%. Return on invested capital (ROIC) fell by an average of 5.7 percentage points, indicating that capital efficiency had deteriorated.

Korea Aerospace Industries’ weak growth was particularly pronounced. The Export-Import Bank of Korea has been its largest shareholder since 2016, holding a 26.4% stake for about 10 years. From 2020 to 2025, Korea Aerospace Industries’ revenue grew by 30.8%, the lowest rate among five major defense companies. Over the same period, Hanwha Aerospace’s revenue rose by 401.8%, while Hyundai Rotem and LIG Defense & Aerospace recorded increases of 109.6% and 169.1%, respectively.

Korea Aerospace Industries’ operating profit growth was also limited to 92.9%, trailing Hanwha Aerospace (1,166.4%) and Hyundai Rotem (1,125.5%). The gap was also evident in the expansion of production capacity. From 2020 to 2025, tangible assets at four competitors grew by an average of 210.8%, while those at Korea Aerospace Industries increased by just 8.4%. Its ROIC also fell from 2.2% to 1.7%.

HMM, whose major shareholder is the Korea Development Bank, also performed poorly. From the first half of 2021 to the first half of 2026, Pan Ocean’s operating profit rose by 107.9%, while HMM’s fell by 74.1%.

Performance gaps with competitors were also evident in shipbuilding and construction. From 2018 to 2023, HD Korea Shipbuilding & Offshore Engineering and Samsung Heavy Industries increased their revenue by 61.8% and 52.1%, respectively, while Daewoo Shipbuilding & Marine Engineering, which was then under the Korea Development Bank’s management and is now Hanwha Ocean, saw its revenue decline by 23.2%. From 2017 to 2022, Daewoo Engineering & Construction’s revenue also fell by 11.5%, below the average growth rate of 20.6% among six major competitors.

Kumho Tire’s revenue likewise fell by 30.8% from 2013 to 2018, and its operating profit turned into a loss. Over the same period, Hankook Tire & Technology and Nexen Tire recorded average revenue growth of 5.5%.

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