Active in Overseas Expansion
As the South Korean government recently pledged to help domestic banks push into the global market, overseas direct investment by domestic finance and insurance companies is showing an upward trend. The number of new overseas subsidiaries set up by Korean finance and insurance firms increased by 60 in the second quarter this year.
According to a report released by the Overseas Economic Research Institute under the Export-Import Bank of Korea (Korea Eximbank) on Nov. 20, the amount of overseas investments by domestic finance and insurance firms came to US$3.87 billion (4.37 trillion won) in the second quarter, up 34.6 percent, or US$1 billion (1.13 trillion won), from US$2.88 billion (3.25 trillion won) a year earlier.
The finance sector accounted for US$3.66 billion (4.13 trillion won), insurance and pension for US$132 million (148.96 billion won) and financial insurance services for the remaining US$81 million (91.41 billion won). The number of new subsidiaries overseas also rose from 42 to 60 over the same period.
Yearly overseas investments by domestic finance and insurance companies are also on the rise. The figure increased by US$2.3 billion (2.6 trillion won) from US$7.06 billion (7.97 trillion won) in 2015 to US$9.37 billion (10.57 trillion won) in 2016 and it nearly doubled to US$13.63 billion (15.38 trillion won) in two years last year.
The number of new subsidiaries of the finance and insurance businesses also increased from 112 in 2015 to 157 in 2016 and 184 in 2017.
By region, investments in Europe and North America increased sharply. The domestic finance and insurance industry excelled other key industries, such as manufacturing, real estate and wholesale and retail in terms of investment in Europe and North America.
The industry’s investment in North America amounted to US$1.3 billion (1.47 trillion won) in the second quarter this year, nearly doubled from US$760 million (857.66 billion won) last year. It was the highest figure among the key industries. That in Europe also rose by a whopping 56.3 percent to US$900 million (1.02 trillion won) in the second quarter from US$580 million (654.53 billion won) a year ago, reaching the highest among the key industries.
In the Asian region as well, investment by domestic finance and insurance firms showed a clear increasing trend. The figure stood at US$720 million (812.52 billion won) in the second quarter this year, up 62 percent from US$440 million (496.54 billion won) at the same period last year. For Central and South America, the amount of investment slightly slid to US$910 million (1.03 trillion won) in the second quarter from US$998 million (1.13 trillion won) a year earlier. However, the figure showed an upward trend by year. The amount of investments in Central and South America grew from US$2.2 billion (2.48 trillion won) in 2015 to US$3.4 billion (3.84 trillion won) in 2016 and US$4.48 billion (5.06 trillion won) in 2017.