Among the four major commercial banks (KB Kookmin, Shinhan, Hana, Woori Bank), Woori Bank and Hana Bank, whose overseas subsidiaries' results fell sharply last year, will move to strengthen their overseas businesses next year.
According to the financial sector on the 2nd, Woori Bank recently established a regional headquarters for Asia in Singapore. Woori Bank is the first commercial bank to set up a separate overarching headquarters to run operations in the Southeast Asian market. Woori Bank has 13 branches and nine local subsidiaries in Asia, and the regional headquarters oversees them. With the launch of the regional headquarters, Woori Bank plans to bolster corporate finance and investment banking to support Korean corporations that have expanded overseas.
Hana Bank, which added four branches worldwide last year, plans to expand collaboration between its domestic and overseas business headquarters this year. The global foreign exchange (FX) business launched at the London branch will be extended to Germany, Singapore, and elsewhere. Global FX is a service that links with global brokers to support around-the-clock transaction in 26 currency spot, forward, and swap (Swap) trades. In line with the policy to advance the foreign exchange market, the bank plans to extend trading hours and target demand for won from foreign corporations and investment institutions.
Woori Bank and Hana Bank saw their overseas results drop sharply last year. Cumulative through the third quarter last year, Shinhan Bank and KB Kookmin Bank posted net income at overseas subsidiaries of 434.3 billion won and 117.1 billion won, respectively. In contrast, Woori Bank and Hana Bank recorded 66.6 billion won and 89.1 billion won, down 55% and 26% from a year earlier. Woori Bank was hit by a financial incident at its Indonesian subsidiary, while Hana Bank suffered large losses at its Russian subsidiary.
The expansion of domestic banks into overseas markets is accelerating. To diversify their revenue structures, they have widened their reach from a Southeast Asia focus to Europe, India, and Africa. They also explain that overseas branches can serve as productive sources of financing because they are heavily used by Korean corporations that have entered local markets.
The financial authorities plan to strengthen supervision of the growing number of overseas branches. Lee Chan-jin, governor of the Financial Supervisory Service, said at a comprehensive audit of the National Policy Committee in September last year that "to supplement the supervisory framework for banks' overseas subsidiaries, we will swiftly prepare legislative improvements and ensure they can be implemented immediately in step with the government announcement."