Banks fortify offshore expansion drive

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Major commercial and state-run lenders are rushing to expand their offshore presence, stymied by the rapid saturation of the local market, market watchers said Monday.

Korea’s top five commercial banks are KB Kookmin, Shinhan, Hana, Woori and NH NongHyup. Their state-run peers are Korea Development Bank (KDB) and Industrial Bank of Korea (IBK).

Woori, KB, KDB, and IBK are contemplating establishing new branches in India, while Shinhan and Hana are gearing up to expand their global networks, with plans to include the U.K., Mexico, and Africa, thereby strengthening their presence in these regions.

The anticipated opening of two new branches by Woori in Pune and Ahmedabad is poised to increase the bank's total branch count to five in the South Asian country.

Woori opened a branch in Chennai in 2012 and set up two more branches in Gurugram and Mumbai in 2017.

KB plans to establish one each in Chennai and Pune before September, raising the total to three including the Gurugram branch.

The local banks stand to enhance their profits, buoyed by a consistent demand for corporate financing in India's highly industrialized regions.

At the forefront of potential customers are Korea's manufacturing giants – Samsung Electronics, Hyundai Motor, and LG Electronics – all of which maintain significant manufacturing operations in the country.

KB intends to broaden its presence in Beijing, China; Yangon, Myanmar; Phnom Penh, Cambodia; and Jakarta, Indonesia.

The lender plans to establish a “Korea Desk” in Warsaw, Poland, to expand corporate financing for Korean manufacturers in Central Europe.

Shinhan plans to establish strong footholds in Monterrey, Mexico and Africa, a move that bolsters its business in London – home to its global finance center.

IBK plans to upgrade its office in Brochów, Poland, while efforts will continue to establish a new branch in Chennai.

Hana intends to expand its presence in Warsaw, Poland; London, U.K., and Monterrey, Mexico. Meanwhile, Hana is gearing up to strengthen its offshore business, exemplified by its recent opening of an office in Budapest, Hungary, in March.

“Hungary is known to be home to the world’s fourth-largest battery manufacturing facility, with a steady influx of significant foreign capital linked to rechargeable battery businesses,” a Hana official said.