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Lee Kwang-goo, |
Woori Bank will add 100 overseas branches next year in five Southeast Asian countries in an aggressive push to generate growth away from the saturated domestic market.
"We have recently drawn up our expansion strategy in the Philippines, Indonesia, Vietnam, Myanmar and Cambodia," a bank official said Friday. "The expansion will be largely propelled by mergers and acquisitions of local banks."
Woori Bank is in talks to acquire a merchant bank in the Philippines early next year, with a plan to establish a local branch in Vietnam and India in the first half, the official said.
Korean banks increasingly find no other option but to go abroad to weather declining margins at home amid low interest rates and low growth. Their main customers have been Korean companies operating overseas but they have begun looking at local companies and retail customers.
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Woori Bank, which runs some 200 branches in 18 countries, plans to increase the number to 300 by 2016 and to 500 by 2020, according to its long-term global strategy.
"To achieve this aim, we will further step up our efforts to penetrate into emerging economies which have high growth potential in terms of demand for financial services," the official said.
In its latest achievements, Woori acquired a 74 percent stake in Indonesia's Saudara Bank, with 119 branches, for about $100 million last December.
In May, Woori opened its seventh branch in Cambodia, while starting the services of WiBee Bank, the Internet-only banking service, in the relatively highly connected country.
"Depending on the penetration rate of smartphones, we will consider launching the WiBee Bank service in Vietnam and other Southeast Asian countries in the first half of next year," the official said.
In September, Woori received approval from Myanmar authorities to set up a microfinance company aimed at providing financial services to local retail customers. "The procedure to rent a building for the business and hire local employees will start soon," the bank said.
If a local customer applies for a loan from WiBee Bank on his smartphone in Korea, the bank transmits the requested money to his bank account. But in an emerging market where the number of banks has yet to be increased, a Woori Bank employee pays a visit to the customer in person to handle the request, the official said.
On top of the banking business, Woori Finance Group is also considering the advance of Woori Card into those emerging markets, where only banks are allowed to do credit card business, the banking group said.
"Woori Card is eyeing small loans and installment financing, the demand for which is on the rise in emerging economies," another official said. "The initial target markets will be decided next year."
Korea's benchmark interest rate is at a record low 1.5 percent and its economy is widely expected to grow less than 3 percent this year due to growing external risks such as the anticipated U.S. rate hike and China's economic slowdown.
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