South Korean financial institutions are poised to join the U.S. anti-Huawei campaign.
In November last year, NH Nonghyup Bank selected KT as the preferred bidder for its dedicated line construction project for connecting more than 1,100 NH Bank branches and more than 4,700 branches of the National Agricultural and Livestock Cooperative Federations in that KT is the best partner in covering the nationwide networks. Their contract is scheduled to be renewed in September this year. NH Nonghyup Bank, however, is planning to notify KT that there will be no renewal if KT continues to use Huawei’s communications equipment in its banking networks.
At present, Huawei’s equipment is suspected of stealing information worldwide. The problem is that a direct ban from NH Bank can lead to retaliation from China and connivance can result in U.S.-led restrictions. This is why NH Bank is putting pressure on KT, which used equipment of Alcatel-Lucent (Nokia) for dedicated line construction before holding hands with Huawei to save costs. The bank is going to upgrade its Nokia equipment in the worst-case scenario.
Under the circumstances, Huawei’s plan to enter the South Korean financial market via NH Bank is being stymied. “With NH Bank joining the global campaign, no Huawei equipment is likely to be found for the time being in the South Korean financial sector,” said an industry source.
NH Bank is keeping a close eye on how its pressure on KT will affect its business in China. Nonghyup Financial Group, the parent company of the bank, is planning to enter the Chinese market in partnership with China Co-op Group, one of the largest agricultural and fishery product distributors in China. Two years ago, NH Capital bought 30 percent of and became the second-largest shareholder in a lease company of the Chinese group.