Woori Bank Targets Emerging Markets
By Na Jeong-ju
Staff Reporter
Woori Bank CEO Park Hae-choon said Monday the bank will focus on expanding its overseas presence this year, targeting emerging markets, such as Brazil, the United Arab Emirates and Malaysia.
Last week, the country's third largest lender won approval from South Korean regulators to open offices in Sao Paulo, Kuala Lumpur and Dubai. It plans to submit applications in the cities shortly to begin banking businesses there this year.
``Korean banks have suffered a sharp fall in interest income, and the situation will worsen further in the coming years,'' Park said in an interview with Yonhap News Agency. ``We should find next growth engines in overseas markets. We are targeting Brazil, Malaysia and Dubai.''
On Jan. 17, the bank will set up a subsidiary in Moscow. It also plans to increase its number of branches in China and the United States to 11 and 4, respectively, by the end of this year.
Korean banks have been suffering from narrower profit margins amid fiercer competition among themselves and non-banking financial firms, and have been under growing pressure to develop new cash cows overseas.
``Our goal is to make Woori a larger, stronger and faster bank,'' Park said. ``To that end, we need to concentrate on developing new business models and become more competitive on the global stage.''
Korean banks have been making inroads into global markets, preparing to launch financial services not only for Korean firms operating there but for local corporate and retail clients.
Woori launched Woori Bank China Ltd. in Beijing to provide retail banking services, becoming the first South Korean lender to set up a subsidiary in China. By 2010, the bank aims to open 53 branches in China and raise the number of branches to 200 around the world, according to Woori Financial Group Chairman Bahk Byong-won.
The Financial Supervisory Commission has recently decided to liberalize the establishment of overseas branches by Korean financial institutions by significantly streamlining pre-consultation requirements. This is expected to help facilitate overseas expansion of Korean banks.
As of the end of last year, nine major Korean banks had 113 overseas branches and offices, of which 23 were located in China. Japan came next with 11. Besides China, Korean banks are also actively starting and upgrading their operations in Vietnam, Cambodia, India and Kazakhstan.