Korean banks see jump in overseas revenue

KEB Hana boasts best overseas performance for 2 consecutive years

By Lee Kyung-min

Korean lenders have enjoyed steady growth in their revenue and income from abroad on the back of their efforts to strengthen their overseas presence, particularly in Southeast Asia.

KEB Hana Bank recorded a net income of 297.5 billion won ($263 million) in its global operations in the first nine months of 2018, the best overseas performance among the four major Korean banks for the second consecutive year.

This accounted for 15.7 percent of its 1.89 trillion won revenue in the cited period.

“Our overseas network has been steadily expanded,” a KEB Hana official said. “We have opened 14 branches overseas in the first nine months of this year. We will continue with this business strategy, fully capitalizing on our well established overseas channels based on foreign currency exchange operations.”

Shinhan Bank's overseas business saw 244.8 billion won in net income in third quarter, a 24.4 percent increase from a year earlier.

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 office in Ho Chi Minh City in 1993.

The bank's business prospects were boosted following the acquisition of Austrailia's ANZ, which helped with the bank's retail business by strengthening lending services for locals there.

The bank's online app SOL is becoming popular following upgraded features including a customizable interface for customers' app usage habits as well as secure login through recognition of a pattern, fingerprint or pass-code. Over 110,000 Vietnamese customers subscribed to the app, with the number steadily rising.

“We will continue our efforts to achieve our 2020 Vision to boost nonbanking and global operations, thereby helping the firm to become a leading financial group,” a Shinhan official said.

Under the vision, the bank plans to make 20 percent of its profit through overseas operations, an attainable goal given the 14.5 percent profit garnered in the first half of 2018, according the bank.

Woori Bank has been expanding its overseas network at the fastest pace, with its number of offices abroad standing at 422 in September, up 121 from the end of 2017 and nearly double that of Shinhan's 163.

The growth came after the bank's acquisition of a local financial services firm in Cambodia, which has 220 billion won in total assets and 106 branches.

The move came four years after the bank first entered the country in 2014.

“We are well on the path to achieving the goal of increasing the number of overseas branches to 500, announced by the bank CEO Sohn Tae-seung at his inauguration ceremony in 2017,” said a spokesman.

KB Kookmin Bank, with the smallest overseas presence among local banks, managed to record triple the profit it made last year.

Korean banks' growing overseas expansion comes as part of their strategic move to identify new sources of revenue amid the local market increasingly nearing saturation.

The initiative is also in line with the “New Southern Policy,” a signature diplomatic approach from President Moon Jae-in, self-defined by his emphasis put on people, peace and prosperity.

Shinhan and KB said they will expand their business portfolio to strengthen their presence in investment banking.