South Korea’s top commercial banks are stepping up their presence in India, betting on the world’s most populous nation as global investors and corporations shift away from China-centered supply chains amid escalating US-China tensions.
According to the country’s financial industry on Wednesday, Korean lenders currently operate 18 branches in India, more than in any other foreign country. That exceeds 17 in the US, 10 in China and Vietnam, each, and nine in Japan.
With new outlets planned by Hana Bank and NongHyup Bank later this year and next year, respectively, the total is set to surpass 20 soon for the first time.
Korean banks’ aggressive inroads into India underscore growing financial needs from Korean conglomerates that have expanded operations in the country, which is emerging as a so-called post-China hub for manufacturing and consumption.
Automakers, electronics producers and smaller suppliers are deepening their local presence, creating steady corporate banking needs, while lenders are also drawn to India’s fast-growing middle class and its increasing appetite for financial services.
HANA, NONGHYUP LEAD EXPANSION
Hana Bank, Hana Financial Group’s flagship banking unit, plans to open new branches in Mumbai and Devanahalli, near Bengaluru, by the end of this year.
The lender entered India in 2015 with a branch in Chennai and added another in Gurugram in 2019.
The new offices will anchor its network in both India’s financial capital and its technology corridor, home to a large concentration of Korean manufacturers and research and development centers.
NongHyup Bank, which opened its first Indian branch in Noida in May 2023, is scouting locations for a second office, targeted for next year, according to sources.
A senior executive overseeing the bank’s global operations visited Noida last month to review business conditions and growth potential.
Korean lenders are accelerating their expansion in India as Korean corporations have lately poured fresh investments in the South Asian country.
Hyundai Motor Group, which entered the market in 1998, has steadily ramped up production and sales operations.
Samsung Electronics Co. has increased investment in its R&D centers in Bengaluru and Noida, while LG Electronics Inc. is preparing to build a new factory in Sri City, an industrial hub in the eastern state of Andhra Pradesh, following its existing plants in Noida and Pune.
LG Electronics also plans an initial public offering of its Indian unit in the local stock market this year.
A widening base of small and midsize suppliers supporting these conglomerates is also creating steady demand for corporate banking, trade finance and foreign exchange business for Korean lenders.
RETAIL OPPORTUNITY AND GEOPOLITICAL TAILWINDS
Analysts say Korean banks are also eyeing India’s long-term retail prospects, supported by a population of 1.4 billion and a growing middle class that is fueling demand for consumer loans, mortgages and digital finance.
The country’s rapid economic growth, coupled with geopolitical shifts and the US-China tariff standoff, is prompting global businesses to diversify manufacturing and capital toward India, creating new financial opportunities for Korean institutions.
“The overseas strategy that once focused on Southeast Asia is now diversifying,” said a senior executive at a Korean bank.
“Competition among Korean lenders to establish a foothold in India’s financial market is heating up.”
By Hyun-Ju Jang
blacksea@hankyung.com
Sookyung Seo edited this article.
