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Korean Banks Rushing to Southeast Asian Markets
Seeking More Profits
Korean Banks Rushing to Southeast Asian Markets
  • By Jack H. Park
  • February 9, 2015, 06:09
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President Park Geun-hye delivers an introductory speech at the ASEAN-Korea CEO Summit held at Bexco in Busan on Dec. 11, 2014.
President Park Geun-hye delivers an introductory speech at the ASEAN-Korea CEO Summit held at Bexco in Busan on Dec. 11, 2014.

 

Korean banks are focusing on overseas Asian markets, including the Philippines and India, so as to cope with the current low interest rate trend by means of their economic growth rates of over 7 percent and high loan-deposit spreads. 

Shinhan Bank is looking to set up a branch in Manila. The Philippine government allowed fully-owned foreign banks and branches last year for the first time since 1995, and eased the limit on foreign banks’ market share. Shinhan Bank is planning to expand its sales networks in Asia to the Philippines from Vietnam, India, Singapore, and Myanmar. 

Woori Bank is going to widen its retail banking network in Indonesia by making use of Bank Woori Indonesia (BWI) and Bank Saudara (Tbk), which are scheduled to be merged late this month. Once the acquisition of Bank Saudara is completed, Woori Bank will become the Korean bank with the largest number of overseas branches, specifically 184 in 18 countries. It is planning to increase the number to 200 branches this year. 

Woori Bank is expanding its business in Cambodia, too. In July last year, it established Woori Finance Cambodia as a small loan provider. The institution is planned to be converted into a bank in 2017 after obtaining the license. 

The Industrial Bank of Korea (IBK) is increasing the number of its Southeast Asian branches as well. It opened offices in Phnom Penh and Jakarta last year, and is planning to make inroads into the Philippines and the Middle East. 

The Hana Financial Group, in the meantime, is aiming to increase the ratio of overseas business profits to approximately 10 or 40 percent between this year and 2025. It started its business in Indonesia in March 2014 and in China nine months later, and branches are slated to be opened in China, Indonesia, India and many more this year.