Among the four major commercial banks (KB Kookmin, Shinhan, Hana, Woori Bank), Woori Bank and Hana Bank, whose overseas affiliate results fell sharply last year, will move to strengthen their overseas operations next year.
According to the financial sector on the 2nd, Woori Bank recently established a regional headquarters for Asia in Singapore. Among commercial banks, Woori Bank is the first to set up a separate control headquarters to operate 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 strengthen 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 domestic and overseas business headquarters this year. The global foreign exchange (FX) business launched at the London branch will be expanded to Germany, Singapore and elsewhere. Global FX is a service that, linked with global brokers, supports 24-hour transaction in spot, forward and swap across 26 currency. In line with the foreign exchange market advancement policy, the bank plans to extend trading hours and target the won demand of foreign corporations and investment institutions.
Woori Bank and Hana Bank saw a sharp drop in overseas results last year. On a cumulative basis for the third quarter last year, Shinhan Bank and KB Kookmin Bank posted net income of overseas affiliates 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, respectively. Woori Bank was hit by a financial incident at its Indonesia subsidiary, while Hana Bank suffered large losses at its Russia subsidiary.
Korean banks are accelerating expansion in overseas markets. To diversify their revenue structures, they have widened their footprint from a Southeast Asia focus to Europe, India and Africa. They also explain that overseas branches can serve as productive financing channels because many Korean corporations that have entered those markets use them.
The financial authorities plan to tighten supervision of the growing number of overseas outlets. At a comprehensive audit by the National Policy Committee on Sept. last year, Financial Supervisory Service Governor Lee Chan-jin said, "To supplement the supervisory framework for overseas bank affiliates, we will swiftly prepare legislative improvements and ensure they can be implemented immediately in step with the government's announcement."