Targeting the rapidly growing Asian market, the leading Korean financial group has been expanding global networks, attempting to open local branches and subsidiaries as well as enhance business ties with foreign banks such as ICICI
KB Financial Group (KBFG) is stepping up efforts to expand its global network, including opening overseas branches and forming business alliances with foreign financial companies in a bid to support Korean companies making a foray into foreign markets and to create new revenue sources.
KBFG is keenly interested in Asian markets such as China, India, Indonesia, and Vietnam, which are rapidly growing and likely to continue doing so.
KBFG has been actively expanding its sales capabilities and network in China. The financial group opened a branch in Guangzhou back in 2007, Harbin in 2008 and Suzhou in 2010, and is currently working on the establishment of a Beijing Branch and local subsidiary in November. At the same time, it is strengthening business ties with foreign banks such as ICICI Bank and Industrial and Commercial Bank of China (ICBC).
KBFG also solidified its business base in Vietnam by opening an office in Hanoi in October, following the establishment of a branch in Ho Chi Minh in June last year.
The financial group intends to take the most suitable form of market penetration, such as opening an office or branch, establishing a local subsidiary and making equity investments after fully considering local compliance and business conditions.
Notably, KBFG is planning to add one or two branches every year in light of the fast-rising Chinese market and business environment. Its existing branches in China have been actively supporting Korean companies entering the local market by offering financial services including loans and FX, as well as expanding financial transactions with local businesses.
The financial group is also working on partnerships with local banks. In June, KB Card joined hands with ICBC and launched “ICBC-KB Be*Twin Debit Card” for Chinese customers residing in Korea.
The co-branded card targets Chinese people living in Korea who hold an account with ICBC’s local branches (Seoul, Daerim, Busan) and is issuable at these branches.
Chinese residents in Korea will find this convenient as it allows them to make payments from their existing account with ICBC and conduct financial transactions such as cash withdrawals and fund transfer services using KB ATMs without the need to open an account with KB.
Approximately 700,000 Chinese currently live in Korea, accounting for half of all foreign residents. Chinese residents studying or working in Korea are expected to enjoy financial services in a more convenient manner thanks to the co-branded card.
KBFG is also enhancing cooperation with ICBC in the analysis of Korean and Chinese financial markets, as well as relevant theories. Furthermore, they carry out joint research projects, hold joint seminars, exchange periodicals and invite researchers from each other. Efforts are also under way to expand Global CMS services and enter into a partnership in FX.
As for advanced markets such as Japan, KBFG has been supporting Korean businesses wanting to enter local markets and making selected forays into regions where it stands a chance of succeeding based on its unrivaled products, services and risk management skills. As part of this, the group opened a branch in Osaka in August. This new branch, along with its Tokyo Branch which was established in 1992, is expected to allow it to provide financial services across the country’s economic centers and to further expand its operations there.
KBFG is determined to offer premium quality services not only to Korean residents and corporations but also to Japanese companies based on its own business process and know-how.
An official from KBFG said, “Communication and cultural relevance are the most vital elements for the success of such overseas expansion. We are planning to focus on Asian markets which share the same sentiment as us.”
With the launch of Osaka Branch, KBFG now has a presence in 10 countries.