Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Major Korean banks seek to expand overseas operations
Woori Bank headquarters in central Seoul / Courtesy of Woori Bank
By Anna J. Park
Woori Bank takes most aggressive stance in expanding its overseas market
Korea's major commercial banks are set to actively strengthen their overseas businesses next year, aiming to significantly raise their profit shares from international markets, according to industry officials, Friday.
Currently, the domestic banks rake in about 10 percent of their total profits from overseas countries, which lag far behind some of the mega-sized banks in Japan, such as MUFG (Mitsubishi UFJ Financial Group), which generate nearly 50 percent of their profits from global markets.
Among local major banks, Woori Bank is taking the most aggressive approach, planning to open eight new branches in countries including the U.S., India, Vietnam, and Cambodia next year.
The bank has recently unveiled its ambitious long-term goal of increasing the percentage of profits earned from global markets from the current 15 percent to 25 percent by 2030. The bank will be focusing on expanding its presence mainly in the U.S. and Southeast Asia next year, but it intends to expand its operations into the Middle East and Poland as key overseas hubs in subsequent years. At the same time, Woori Bank seeks to explore overseas ventures for its subsidiaries, including Woori Card and Woori Capital.
"Woori Bank's strength in global business lies in its balanced and harmonious network between both advanced countries and developing nations, as well as between corporate finance and retail banking operations. The bank will continue to enhance its capabilities based on a solid understanding of local markets," Yun Seog-mo, executive vice president of Woori Bank's global business group, said during the bank's press conference in late October.
Woori Bank opened a branch in Can Tho, a southern city of Vietnam with huge potentital to grow into an economic hub, on Nov. 8. The bank now has 21 branches around Vietnam and plans to expand the network to 29 by next year.
Hana Bank plans to open at least four new branches globally next year, including Los Angeles and Atlanta in the U.S., Monterrey in Mexico, as well as in Hungary. The bank has expressed that it may consider additional branch openings in other parts of the world, depending on the circumstances.
Shinhan Bank has plans to add four more branches in Vietnam and one more in Cambodia next year, as the bank aims to strengthen its overseas networking centered on the Vietnamese market. Shinhan Bank already opened up five branches in Vietnam this year alone.
KB Kookmin Bank, meanwhile, is planning to establish two new overseas branches next year, including Chennai, India. The bank plans to strengthen existing branch operations, while pursuing acquisitions in the overseas market. KB Kookmin Bank aims to generate at least 10 percent of its net profit from overseas operations.
In 2022, the bank's global businesses took up 12.8 percent of its total net profit, excluding its Indonesian subsidiary, KB Bukopin.
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Despite the banks' active plans to beef up their respective global presence and profits, overseas businesses by domestic lenders took up less than 20 percent of their total net profits from last year.
Among the four, Hana Bank, which owns a strong network of foreign networks from its past acquisition of the Korea Exchange Bank, has the highest proportion of global business in its consolidated net profits at 19.2 percent last year. Shinhan Bank and Woork Bank followed the list with 15.8 percent and 15.4 percent, respectively. KB Kookmin Bank posted an annual deficit in its total overseas business last year, with the loss incurring at the Indonesian subsidiary, KB Bukopin, setting aside reserves amounting to 570 billion won ($432 million).