By Choi Kyong-ae
Woori Bank said Monday it will work with a Chinese and a South African bank to provide financial services to Chinese companies operating in South Africa.
Woori has signed an initial agreement with the Industrial and Commercial Bank of China and the Standard Bank of South Africa to expand into African financial markets, the bank said in a statement.
"We will provide financial services to Korean and Chinese companies which have already advanced into Africa or are planning to enter," an official said.
Currently, Woori Bank does not have a branch in Africa. To make a presence in the African market, the bank will offer customized services to the companies through its Korean Desk at the Standard Bank of South Africa, the official said.
The Korean Desk will be able to offer customized services in partnership with its Middle Eastern branches in Dubai and Bahrain, he said.
"If the financial demands from Korean and Chinese firms in South Africa are as much as we expect, we will open a branch in the country for expansion across Africa," he said.
As declining interest margins squeeze net interest margins further amid low growth, banks have stepped up their efforts to expand into global markets in recent years.
Korea's benchmark interest rate remains at a record low 1.5 percent and the Bank of Korea is under growing pressure to cut the base rate further due to bigger downside risks such as a U.S. rate increase and China's slowdown.
The Industrial and Commercial Bank of China is the world's biggest bank by assets and it holds a 20 percent stake in the Standard Bank of South Africa. The African bank is the largest bank in South Africa in terms of assets.
Meanwhile, the government is seeking to sell a 48.07 percent stake in Woori Bank out of the 51.04 percent which is held by the state-run Korea Deposit Insurance Corporation (KDIC).
Four attempts to privatize the bank between 2010 and 2014 all failed due to a lack of bidders. Taxpayers' money of over $12 billion was injected into Woori in bailout funds a decade ago.
Last year, China's Anbang Insurance was the only entity which submitted a final bid. The government needs at least two bidders for the sale procedure to progress.
"Government officials recently visited three Middle Eastern countries ― the United Arab Emirates, Kuwait and Saudi Arabia ― to tap into investment demand there. Sovereign fund officials in the countries said they will give a consideration to the deal," the Financial Services Commission said earlier this month.
Woori Bank said Monday it will work with a Chinese and a South African bank to provide financial services to Chinese companies operating in South Africa.
Woori has signed an initial agreement with the Industrial and Commercial Bank of China and the Standard Bank of South Africa to expand into African financial markets, the bank said in a statement.
"We will provide financial services to Korean and Chinese companies which have already advanced into Africa or are planning to enter," an official said.
Currently, Woori Bank does not have a branch in Africa. To make a presence in the African market, the bank will offer customized services to the companies through its Korean Desk at the Standard Bank of South Africa, the official said.
The Korean Desk will be able to offer customized services in partnership with its Middle Eastern branches in Dubai and Bahrain, he said.
"If the financial demands from Korean and Chinese firms in South Africa are as much as we expect, we will open a branch in the country for expansion across Africa," he said.
As declining interest margins squeeze net interest margins further amid low growth, banks have stepped up their efforts to expand into global markets in recent years.
Korea's benchmark interest rate remains at a record low 1.5 percent and the Bank of Korea is under growing pressure to cut the base rate further due to bigger downside risks such as a U.S. rate increase and China's slowdown.
The Industrial and Commercial Bank of China is the world's biggest bank by assets and it holds a 20 percent stake in the Standard Bank of South Africa. The African bank is the largest bank in South Africa in terms of assets.
Meanwhile, the government is seeking to sell a 48.07 percent stake in Woori Bank out of the 51.04 percent which is held by the state-run Korea Deposit Insurance Corporation (KDIC).
Four attempts to privatize the bank between 2010 and 2014 all failed due to a lack of bidders. Taxpayers' money of over $12 billion was injected into Woori in bailout funds a decade ago.
Last year, China's Anbang Insurance was the only entity which submitted a final bid. The government needs at least two bidders for the sale procedure to progress.
"Government officials recently visited three Middle Eastern countries ― the United Arab Emirates, Kuwait and Saudi Arabia ― to tap into investment demand there. Sovereign fund officials in the countries said they will give a consideration to the deal," the Financial Services Commission said earlier this month.
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