China expansion: KB expanding presence in China with localization
KB Financial Group Chairman Euh Yoon-dae, center, cuts a tape with KB Kookmin Bank CEO Min Byong-deok, seventh from left, KB Financial President Lim Young-rok, fourth from left, and other executives of the group and guests during a launching ceremony of KB Kookmin Bank China and the lender’s Beijing branch in the capital city, Wednesday. / Courtesy of KB Financial
By Kim Jae-won
KB Financial Group said Wednesday that it will expand its business in China by launching a local arm of its flagship banking unit and the fourth branch of the lender in Beijing.
The group said that the lender opened KB Kookmin Bank China and its fourth branch in the capital city, in a move to increase its business in the world’s second-largest economy.
The local office and Beijing branch will create synergy with its three outlets in Guangzhou, Suzhou and Harbin, the group said. KB Kookmin entered the Chinese market in 2007 by first launching a Guangzhou branch.
“I am sure that launch of the Chinese operation and the Beijing branch will be a turning point for the development of the financial industry both in Korea and China,” said Euh Yoon-dae, chairman of the group, at his speech during the launching ceremony.
Experts say this is the latest example of the group’s aggressive globalization strategies. KB has sought to reach overseas markets for the last few years with the aim of opening up new revenue sources, given that the local market has been saturated amid stiff competition.
KB Kookmin Chief Executive Min Byong-deok emphasized the importance of the Chinese market as a locomotive of the global economy. “China is a growth engine of the world economy. It is an essential process that we advance to the country for the future of KB Financial Group.”
Min promised to support the group’s globalization strategy by running the business successfully. He said the lender will focus on its strength in retail banking and advanced information technologies.
The group unveiled its keyword of Chinese business: localization. To implement this principle, the bank appointed a Chinese board chairman and outside directors to brace for local customers.
KB said that it will accelerate the localization process with its advanced information technology. “We have no doubt that we can appeal to Chinese customer base with our high-end financial services based on top-class IT system,” said a KB official.
However, it remains to be seen how successful the group can be as it employs this strategy.
Scores of executives of the group and the lender, including KB Kookmin CEO and group President Lim Young-rok, accompanied Euh, demonstrating how seriously KB regards the Chinese market.
Later in the day, the group hosted an academic forum on financial and economic issues between the two countries. Scholars and businesspeople both from Korea and China, including group chairman Euh, former Financial Services Commission chairman Kim Yong-deok and Korea Development Institute professor Hahm Sang-moon, joined the event.
They discussed the Korea-China free trade agreement and financial cooperation, and globalization of the Chinese yuan among other issues. Participants agreed that the bilateral treaty is a good chance for both countries to enforce their cooperation in the finance industry, a relatively lagging sector compared to its manufacturing counterpart.