President Lee Dae-hoon of NH Bank joins the Most Excellent Customers of the bank in a program to help the farmers in Goksong, S. Jeolla Province on Oct. 22. (Photo: NH Bank)

NH Bank is set to launch a wealth management department next year for the first time in its 58-year history as part of its strategy to defuse its image as a special bank for the agricultural sector.

According to financial sources Oct. 17, the move will be included in the bank’s strategy for next year. NH Bank has been the only bank among the five largest commercial financial institurions in Korea that didn’t have a wealth management unit. The bank currently employs only two staff to handle the financial service at its branches across Korea in this area.

The bank didn’t even have a private banking unit, which is rather surprising when looking at the fact that the bank has the largest number of branches and outlets across the country at 1,147, more than KB Kookmin Bank and KEB Hana Bank, the two leading nation-wide commercial banks in the country.

Competition has been tough among the large commercial banks in the wealth management sector.

Kookmin Bank and Shinhnan Bank have been coordinating their wealth management dep’ts with securities affiliates in their financial groups to boost the expertise and the number of clients.

Kookmin Bank returned 261 billion won in net profit in the H1, about 20 percent of the bank’s total profit in the period while Shinhan Bank turned in 237.9 billion won in net profit in the sector, thanks to rising fee income to help the wealth management unit to share a larger share of total profit for the bank.

A leading official of NHBank said around 20 staff will handle the new unit at the beginning, a small but nimble group that is mobile enough to build the new dep’t.

The new dep’t will have a few portfolios to offer clients so any risks can be uncovered before they occur. The new personnel will be added from 2021.

Until a number of years ago, the bank had hard time competing with other commercial banks, because it was stigmatized as the “farm bank” with most of its clients engaged in the agricultural sector.

The bank didn’t have an overseas outlet until 2012, and was often compared to a large, slow-moving bear.

Now the bank wants to be a smart and nimble bear. In April, the bank opened its NH Digital Reform Campus in Yangje-dong, Seoul with a total space of 2,080 square meters, the largest among such facilities run by the commercial banks.

The bank has also been speeding up its global operation, with a plan to set up 11 outlets in 10 foreign countries to boost its earnings. The bank earned 1.218,1 trillion won in net profit last year for the first time exceeding 1 trillion won in annual net profit.

Private wealth management generally involves advice and execution of investments on behalf of affluent clients.

Firms that specialize in these practices are the primary sources for clients looking to invest in a variety of funds and stocks. Wealth management advisors also help with financial planning, manage client portfolios and perform a variety of other financial services in relation to a client’s private financing choices.

Private wealth management services are provided by larger financial institutions, such as Goldman Sachs, but they may also be provided by independent financial advisors or portfolio managers multi-licensed to offer multiple services and who focus on high-net-worth clients.

A wealth management advisor sits down one-on-one with each client and discusses goals, comfort levels with risk and any other stipulations or restrictions the client may have in regard to the investment of his assets.