 |
| The headquarters of Hana Financial Group in central Seoul / Korea Times file |
By Yi Whan-woo
The major banking groups are on alert due to the escalating military conflict between Ukraine and Russia, scrambling to secure their respective business operations in Russia if they have them, and setting up emergency measures to weather the sanctions on Moscow and their impact on the global economy.
The banking arms of both Hana and Woori have been running corporations in Moscow since 2014 and 2008, with Woori expanding its business by opening a branch office in St. Petersburg plus a liaison office in Vladivostok in the early 2010s.
For Hana Bank, its loan exposure, a measure of the maximum possible loss to a lender in the event that a borrower defaults on a loan, was estimated to be 296 billion won ($245.7 million) in the third quarter of 2021.
The banking group launched a response team, which has been monitoring the Russian banks that have been designated on the U.S. Specially Designated Nationals and Blocked Persons List (SDN) after the Russian invasion of Ukraine began on Thursday.
Launched on Thursday, the response team is capitalizing on the hotlines between the Hana Financial Group and its customer companies from Korea to keep track of the developing situation.
"We're analyzing the possible risks faced by our corporation in Russia in multiple directions," Hana Financial Group said in a statement circulated on Sunday.
The downside risks include a drastic fall of the Russian currency, the ruble. The Korean company said that it is working closely with the Korean Embassy in Moscow as well as with the Korean corporate and financial sectors there to "thoroughly look into" the possibility of a fluctuating ruble.
 |
| The headquarters of Woori Financial Group in central Seoul / Korea Times file |
Through the hiring of investment banking professionals and other activities, Woori Bank has been stepping up the sales of Korean companies in Russia, as well as conglomerates in Russia and the Commonwealth of Independent States (CIS). The former states of the Soviet Union, or the CIS member countries, have been building economic ties with Russia.
The estimated loan exposure of Woori Bank was 266.4 billion won in the third quarter of 2021.
The Bank said that the exposure could involve Russia and its border countries and that minimizing the exposure remains its priority issue.
"We correspondingly set up a contingency plan that takes all possible risks factors into account," a Woori Financial Group press officer said.
The two other banking groups ― KB and Shinhan ― do not have business in Russia and do not face direct risks linked to the Ukraine crisis.
For Shinhan Bank, it operates businesses in Poland, Hungary and other Eastern European counties bordering Russia. Its loan exposure stood at 35.3 billion as of the end of 2021. The involved customers are mostly Korean companies and "there is very low risk of not receiving back the loans," according to Shinhan.
Both Shinhan and KB, however, are monitoring the situation more frequently than in the past few months. Shinhan additionally implemented risk management for the entire group and its affiliates.
"We've enhanced our reviews of indicators of market volatility and financing plans in the event of a worsened situation," Shinhan Financial Group said.
KB Financial Group predicted that the Ukraine crisis could prompt expanded global inflation and a rate hike by the U.S. Federal Reserve.
To address the crisis' influence on the financial market with its customers here, KB Kookmin Bank said that it has been sharing relevant up-to-date data.
![[INTERVIEW] Ecolab helps Korean partners profit from ESG management](https://img.koreatimes.co.kr/upload/thumbnailV2/7a924189dbb7426ab12275ba98702309.jpg/dims/resize/178/optimize)
![[INTERVIEW] 'Lifeline for migrant workers in Korea' - Rev. Kim fights for foreign employees' rights](https://img.koreatimes.co.kr/upload/thumbnailV2/8fb4b5d381da49df90276394550f2889.jpg/dims/resize/178/optimize)
![[ANALYSIS] Has N. Korean leader's daughter been confirmed as heir apparent?](https://img.koreatimes.co.kr/upload/thumbnailV2/e65868a1b5834cc3aef853378637d1fd.jpg/dims/resize/178/optimize)
![[INTERVIEW] Korea to work with US, Japan to fight climate change](https://img.koreatimes.co.kr/upload/thumbnailV2/800d9054a14b4a0f9cc576366cc1b914.jpg/dims/resize/178/optimize)
![[INTERVIEW] Hip-hop group Uptown returns after 13 years with new lineup](https://img.koreatimes.co.kr/upload/thumbnailV2/0eae35da5e9c40c38cf439e550a2eb3e.jpg/dims/resize/178/optimize)
