Financial groups to focus on risk management amid downturn

By Jhoo Dong-chan

The nation's big five financial groups have chosen "preemptive risk management" as their key business strategy for 2019 amid the ongoing economic downturn.

Besides the preemptive risk management strategy, they said they will focus on non-banking and overseas businesses to diversify their revenue sources.

The banking groups are also interested in utilizing big data technology to cope with future business environments and customer needs.

"Due to the prevailing protectionism across the world, uncertainties are expected to grow while the unemployment rate will be worsening. Korea will continue its low growth trend next year," said a KB Financial Group official.

"In order to cope with next year's economic situation, KB will strengthen its preemptive risk management system utilizing big data technology while expanding its support to promising local industries."

According to KB Financial Group, Korea's economic growth rate will plunge below 2.5 percent next year. The nation's policy rate will be unchanged at the current level of 1.75 percent, it added.

Woori Bank, which is set to transform itself into a holding company structure next year, has also chosen risk management as its key business strategy.

"Lenders enjoyed record high earnings this year, but the situation will be different next year due to the prolonged economic downturn," a Woori Bank official said.

"Woori Bank has operated its own risk management system exclusively designated for corporate loans. The system will preemptively monitor and manage such loans to control possible risks."

A number of local media alleged Woori will also actively engage in the M&A market in Southeast Asia, but the official denied the allegations.

Woori Bank suggested the nation's growth rate could manage to hover around 2.7 percent next year. It agrees with Shinhan's outlook for next year's key rate ― unchanged at 1.75 percent.

Shinhan Financial Group has also decided to place a top priority on risk management as its key business strategy for next year to cope with ongoing economic downturn.

Separate from risk management, the group added it will focus on creating more profits from non-interest business sectors while improving its wealth management (WM) department as a means to expand future growth.

In a bid to diversify revenue sources, the group added it will also strengthen its global business networks.

Shinhan Financial Group suggested Korea's economic growth rate is likely to dip to 2.6 percent.

NH Financial Group said it will also take a similar business approach for next year while strengthening its big data platform to facilitate business between its subsidiaries. It added the nation's key rate will be hiked three times next year to reach 2.5 percent .

The five financial groups' outlook on Korea's growth rate for next year averages out at 2.56 percent, lower than domestic and overseas major think tanks.

The OECD said Korea's growth rate will stand at 2.8 percent next year while the Bank of Korea believe the rate will be 2.7 percent.

Site Map E-paper Subscribe Register LogIn
Site Map E-paper Subscribe Register LogIn