Woori Bank has been following its strategy to expand its overseas operation more extensively now that the domestic market has been so crowded in order to boost its earnings with so many financial institutions, and low interest rates, to boot.
So much so that the bank has 301 banking units in 25 foreign countries, the highest number of overseas banking outlets among the rival banks at home as of the end of 2017.
The bank operates 238 outlets in Asia alone. The bank kicked off its overseas exploration to find new growth engines in 2014, taking over Sodara Bank in Indonesia, followed by a similar move with Malise Credit Financial Co. in Cambodia and the Wells Savings Bank in Myanmar. The bank continues to expand its operations in Southeast Asia by setting up a wholly-owned local subsidiary in Vietnam.
Woori Bank, Korea's largest bank in terms of consolidated assets as of the end of March, is awaiting approval from relevant authorities to establish a wholly-owned unit in Vietnam, an official said. A Vietnamese banking source said the State Bank of Vietnam, the country's central bank, was expected to grant a license for the South Korean lender shortly.
South Korea is now the biggest foreign investor in Vietnam. Large investments by a number of heavy hitters like Samsung Electronics Co. and LG Electronics aim to turn it into a Southeast Asian production hub. Other major Korean companies in Vietnam include Kumho Construction, Posco group, Hanjin Logistics and Kumho Tire, among many others.
A free trade agreement between South Korea and Vietnam that came into effect in December 2016 gives more incentives for Korean firms to invest. Woori Bank has also been stepping up its overseas expansion strategy so far this year, designed to boot the overseas outlets to 300 from 205 last year.
The bank will also strengthen its fintech application to jack up its image as a leading fintech bank in Korea. The bank also reorganized its operation into three sectors, domestic, overseas and marketing support. It also upgraded the smart financial team to the smart financial operation headquarters and the Investment Banking Team to the Investment Banking Headquarters.
The bank’s overseas strategy for this year calls for turning a rep. office in India to a local subsidiary and take over a medium-sized credit institution offering small loans on credit. The bank also plans to open a branch in Warsaw, Poland, and a local subsidiary in Mexico City, Mexico, by the end of this year.
The bank will also work on the project to a bridgehead for its European operation in consideration of Brexit which will be set up in Germany linked with a financial belt in Europe including a rep. office in Poland. The bank’s European financial belt aims at providing financial support to the Korean firms operating in Europe, Central Europe.
President Lee said the ultimate purpose of the moves is to help get the bank listed among the top 10 in Asia and top 50 banks in the world by 2020. The bank will open a subsidiary in Frankfurt, Germany, rep. office in Warsaw, Poland and a subsidiary in Mexico and Brazil next year in line with its strategy to boost its overseas earnings to 30 percent of all earnings by 2020 from a global financial network 500 branches, rep offices and subsidiaries. The bank intends to boost the share of its earnings from overseas, with a special focus on the countries in Southeast Asia.
Its overseas assets totaled $18.2 billion in 2015, with operating profit running to $320 million, up 20 percent and 12 percent respectively YoY. The bank will further expand its overseas operation to Turkey, and a number of African countries this year, and at the same time, further consolidate its operations in S.E. Asia by boosting its share of the financial markets in the region.
The bank also plans to step up M&As overseas and subsidiaries, especially in Southeast Asia, to expand its overseas operations and boost its overseas earnings.
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