Major Korean banks are increasing their staff in overseas branches to establish a foothold in the global market, according to the Financial Statistics Information System from the Financial Supervisory Service.
The number of staff in overseas branches for four major commercial banks; KB Kookmin Bank, Shinhan Bank, Hana Bank, and Woori Bank have grown more than 150 as of the end of the first quarter over the past year. The number increased by 57 in five government-run banks; Nonghyup Bank, Suhyup Bank, Industrial Bank of Korea (IBK), Korea Development Bank (KDB), and Export-Import Bank of Korea (KEXIM).
Industry sources said that as low-interest rates and low-growth trends continue, financial companies including banks are accelerating steps to enter the global market as making profits in the domestic market becomes harder.
The numbers are expected to grow further as the commercial banks are showing strong will to expand their overseas divisions even though there are concerns that the prolonged Covid-19 situation can hinder banks’ steps to expand their presence in the global market.
Kookmin Bank had received preliminary approval to establish a local subsidiary in Myanmar in April and is working on the acquisition deal to become the largest shareholder of Bank Bukopin of Indonesia.
Shinhan Bank, which had set up 36 branches across Vietnam, is planning to open five more branches in the second half.
Hana Bank president Sun-kyu Ji said on June 28 that the bank was seeking opportunities to expand business in the ASEAN financial market with high-growth potential.
Woori Bank is expanding its network in Southeast Asian nations including Vietnam, Philippines, Cambodia, and Myanmar. Vietnamese Woori Bank had reported a net profit of 14 billion won last year.
Government-run banks are also injecting more capital into their local subsidiaries.
Nonghyup Bank has decided to inject $20 million to Nonghyup Finance Cambodia, its Cambodian subsidiary. It is trying to raise its capital to over $30 million and get a license to become a microfinance deposit taking institution that can receive deposits.
IBK is also trying to change its local office in Myanmar into a subsidiary after receiving preliminary approval from the central bank in Myanmar with Kookmin Bank and KDB. (Reporting by Hyewon Chang)