Financial groups post strong performance abroad

Shinhan Financial Group Chairman Cho Yong-byoung

By Lee Kyung-min

The nation's four financial groups have shown a strong performance overseas over the past two years, backed by their successful business portfolio diversification in Southeast Asia, data showed Sunday.

According to CEO Lab, a business performance review website, the four ― Shinhan, KB, Hana and Woori ― reported a combined 490.9 billion won ($415 million) in net profit in 2018, a 64.3 percent increase from 298.8 billion won in 2016.

Of the total, nearly half, or 48.1 percent was posted by Shinhan whose figure jumped to 236.1 billion won, a 105.4 percent increase from two years earlier.

The strong performance was led by its lucrative subsidiaries in Vietnam and Japan.

Woori Bank CEO Sohn Tae-seung

Shinhan Bank Vietnam saw 94.9 billion won, a 95.3 percent increase, and Shinhan Bank Japan 64.9 billion won, a 34.2 percent increase.

The significant jump was due in large part to the successful operation of Shinhan Bank Vietnam, the largest foreign-invested financial firm there with over 30 branches serving about 900,000 locals since it first opened its office in Ho Chi Minh City in 1993.

Hana reported 123.3 billion won, a 32.7 percent jump from two years ago, accounting for a quarter, or 25.1 percent.

Most of the profit came from the group's bank subsidiary in China which recorded 54.3 billion won, an 89.7 percent increase from 2016.

KB Financial Group Chairman Yoon Jong-kyoo

Woori's 108.2 billion won, a 29.3 percent jump from two year ago, resulted from its bank subsidiaries in Indonesia and the U.S.

Bank Woori Saudara saw the figure jump by 64.3 percent and Woori America Bank 34.4 percent from 2016.

KB's net profit of 23.2 billion won in the same period was the smallest, but its growth rate was the fastest at 220.5 percent.

The brisk performance overseas is an indication of greater growth potential there in the coming years given they account only about 5 percent of their total at most.

Among the four, Woori saw its overseas performance account the largest of the group's net profit with 5.4 percent, followed by Shinhan (5.3 percent), Hana (3.6 percent) and KB (0.6 percent).

Hana Financial Group CEO Kim Jung-tai

Meanwhile, the notable performance comes amid the growing presence of Korean financial services in Southeast Asia, in line with New Southern Policy of President Moon Jae-in.

Countries in the long-untapped region have been stressed as key prospective trading partners amid an increasing need for Korea to reduce its heavy reliance on the U.S. and China.

Financial Supervisory Service (FSS) data released in May showed of the 437 financial services firms' branches opened in 43 countries in 2018, 15 were set up in Cambodia, Myanmar, Vietnam and Indonesia.

FSS said a combined $179 billion in total assets in 2018, a 14 percent increase from the year before, came due in substantial part to the Southeast Asian region.