Kookmin Bank’s branch in Cambodia
South Korean banks are broadening their horizons into Mexico, Poland and Africa beyond Asia in step with Korean manufacturing companies’ global expansion.
The country’s six major banks — Kookmin, Shinhan, Hana, Woori, Nonghyup and Industrial Bank of Korea – operate or plan to open branches or offices in Mexico, Singapore, the UK, India and Poland, according to officials of the banks on Monday.
They will offer corporate financing, foreign exchange services and loans to Korean companies in those countries.
“Korean banks’ overseas expansion has been focused on Southeast Asia. They are now turning to regions where large companies have entered and other new markets such as Africa they have yet to tap,” said an executive of a domestic bank in charge of global operations.
According to the Financial Supervisory Service (FSS), the number of the six bank’s overseas subsidiaries, branches and offices reached a combined 131 as of the end of 2023, compared to 100 in 2015.
Shinhan Bank and Hana Bank will set foot on Monterrey, a city in Mexico as Korean manufacturers are relocating to the central American country bordering the US amid tensions between the US and China.
Last year, Mexico climbed to ninth position from 11th in 2019 in terms of exports.
The Chunmoo multiple launch rocket system
Poland is also a promising market for domestic banks. Korean rechargeable battery manufacturers such as LG Energy Solution Ltd. are building their production lines in the country.
The country also emerged as a major export market for Korean defense companies. In April, Hanwha Aerospace Co., signed a $1.64 billion deal to supply 72 units of Chunmoo multiple launch rocket system (MLRS) to Poland.
Kookmin Bank under KB Financial Group is setting up an office in Warsaw, the capital of Poland, by next month.
Hana Bank and Woori Bank, under Hana Financial Group and Woori Financial Group, respectively, plan to open branches in Warsaw within the year.
The Industrial Bank of Korea (IBK) is seeking to launch a subsidiary in Wrocław. Currently, it operates an office in the Polish city.
“We will offer financing to Korean companies not only in Poland, but also in East European countries such as Hungary, Czech Republic and Slovakia, as well as other countries under the European Union,” said an IBK official.
A facade of Dong-A Hwa Sung’s factory in Chennai, India
Shinhan, Hana and Woori are reinforcing operations and staff in London to meet growing demand for foreign exchange trades in line with the extended trading hours.
Starting in July, trading hours in South Korea’s foreign exchange market will be lengthened from 9 a.m.-3:30 p.m. to 9 a.m.-2 a.m. the following day.
Kookmin Bank and IBK are expanding their presence in Chennai and Pune, India.
In Chennai, Samsung Electronics Co. operates home appliances plants, while Hyundai Motor Co. is building an electric vehicle plant there. LG Electronics Inc. runs electrical appliances plants in Pune.
Dong-A Hwa Sung Co. produces leather parts used for cars and home appliances in Chennai.
Africa is expected to be the next big market for Korean banks.
“We are looking for a location to open a branch in Africa,” said a Shinhan Bank official.
By Jae-Won Park
wonderful@hankyung.com
Yeonhee Kim edited this article
