President Kim Tae-oh of Daegu Bank. (Photos: Daegu Bank)

DGB Financial Group sped up its localization and digital strategy to enter Cambodia and Myanmar, with the group determined to take up mobile and non-face channels to develop an ecological structure to establish a foothold in the S.E. Asian countries with high potential for economic growth.

The group recently set up a task force to take charge of the strategy to enter the region.

The bridgehead is Cambodia, where its local subsidiary is already in operation, the Cambodia DGB Special Bank, a wholly-owned local subsidiary of DGB Daegu Bank.

DGB Daegu Bank acquired Cambodia's Cam Capital Specialized Bank last year and turned it into a local affiliate manned by local employees except a few key positions run by Daegu Bank expats.

The local subsidiary’s operation has been sound, with assets ranked second-largest among the 15 special local banks. Its total assets and profit rate came to 5.5 percent and the Industrial Average Rate at 1.6 percent, which is considered to be high among the special banks in the country.

The default rate is 0.2 percent, which is far below the 2.2 percent average.

The local subsidiary will be turned into a commercial bank to be used as a bridgehead for the southeast Asian region to speed up the expansion of the digital platform around the countries in the region.

Chairman Kim Tae-oh called on Gov. Chea Chanto of the National Bank of Cambodia, the central bank, when visiting the country as a member of President Moon Jae-in’s entourage when he was making a tour of a number of countries in the region early this month, and explained to the central bank the group’s plan to set up its operation in Cambodia.

DGB Financial Group is preparing to open a bank branch in Vietnam. It applied for a license there, the listed financial holding company said. It has so far made inroads into Cambodia and Laos.

“We are looking for opportunities in Vietnam as Shinhan Bank did there. There are a lot of cultural similarities between Korea and Vietnam. This is one of the reasons we are seeking to launch services there,” a DGB spokesman said.

DGB Daegu Bank acquired Cambodia's Cam Capital Specialized Bank last year, and DGB Capital launched DGB Laos Leasing Company in Laos in 2016, he noted.

DGB Daegu Bank was established in 1967, as the first local bank in Korea, seeking to be a pioneer of regional development in Daegu. Despite many grueling challenges, including the oil crisis, the Asian financial crisis, and economic downturn, DGB Daegu Bank has made continuous efforts for the last 50 years to fulfill the dreams of local residents, by making robust business innovation, establishing more advanced management infrastructure, and preemptively responding to the new finance environment in the future.

DGB Financial Group raked in the largest net profit last year since its transition into a holding company structure in 2011, benefitting from its addition of HI Investment & Securities.

The Daegu-based financial holding firm announced Tuesday that its net profit on a consolidated basis in 2018 amounted to 383.5 billion won ($341.1 million), up 26.9 percent from the previous year. The gain was attributable to the 161.3 billion won worth profit from its takeover of HI Investment last year.

Although operating profit fell 18.4 percent on year to 333.9 billion won due to the voluntary retirement program and increased allowances for bad debts, the return on assets (ROA) and return on equity (ROE) improved to 0.64 percent and 9.27 percent, respectively.

Total assets of the group came to 74 trillion won in 2018, up 10.7 percent from a year ago.

A view of the building in downtown Daegu where DGB Fin. Group has offices.

A view of the building Cambodia's Cam Capital Specialized Bank has offices.