Dignitaries, including Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki, Chairman Eun Seong-soo of the Financial Services Commission, Gov. Lee Ju-yeol of the Bank of Korea and Chairman Yoon Seok-hyun of the Financial Supervision Service and Chairman Kim Tae-young of the Korea Federation of Banks, attend a joint New Year’s gathering for the financial sector at Shilla Hotel in Seoul on Jan. 2.

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki delivers a speech at a joint New Year’s gathering for the financial sector at Shilla Hotel in Seoul on Jan. 2. (Photos: KFB)

Six financial associations held a joint New Year’s gathering and called for financial reform to open the new year full of hope at Hotel Shilla on Jan. 3 in Seoul.

The Deputy Prime Minister as well as Minister of Strategy and Finance Hong Nam-ki led the public side of participants, which included Chairman Eun Seong-soo of the Financial Services Commission (FSC), Gov. Lee Ju-yeol of the Bank of Korea, Chairman Yoon Seok-hyun of the Financial Supervisory Service (FSS) and Chairman Kim Tae-young of the Federation of Banks.

Also attending was Rep. Min Byung-doo, chairman of the Political Affairs Committee of the National Assembly, among some 1,300 people representing banks, insurance firms, and securities firms, and other financial institutions in the country.

DPM Hong in his speech said the financial industry should work towards reform and a hard work to cope with changes being made in the financial environment, joining heads of financial institutions, including the monetary, government finance and financial authorities, who all called for financial reform in their speeches at the gathering.

The top financial official promised their support to approve three laws on data to help the financial reform as soon as possible this year. FSC Chairman Eun said FSC will secure 600 billion won in funds to support the financial reform and the speedy expansion of comprehensive finance urging the legislators to pass the 3 this year, including a law on credit information.

The central bank governor also promised the central bank’s support for a speedy 4th Industrial Revolution in the financial sector to help financial services grow and diversify as a new growth engine.

FSS Chairman Yoon said the progress made in the financial digitalization and reform in financial platforms, including open banking, has changed the financial services, calling on the financial industry to make responsible reform with the changing financial technology.

South Korean banking giants will be on the lookout for more mergers and acquisitions this year to strengthen their business portfolios, their executives said.

“We will pursue M&As in a bold and swift manner when the opportunity comes,” Yoon Jong-kyoo, chairman and CEO of KB Financial Group Inc., said in a New Year's message.

Cho Yong-byoung, chairman and CEO of Shinhan Financial Group, and Sohn Tae-seung, chairman and CEO of Woori Financial Group, also said their groups will seek strategic M&As in the latest efforts to boost their business portfolios.

The three did not give any further details on potential targets.

The South Korean banking giants have been racing to expand their business portfolios and secure new growth momentum amid declining margins due to record low interest rates and tough competition in the nearly saturated domestic market.

KB Kookmin Bank, the flagship unit of KB Financial Group, decided to take over a 70 percent stake in Prasac Microfinance Institution Ltd. in Cambodia for $603 million. KB plans to acquire the remaining 30 percent stake in Prasac within the next two years. In 2018, KB invested 114 billion won to gain a 22 percent stake in Indonesia's Bank Bukopin in a move to enter the Southeast Asian microfinance markets.

KB Financial Group saw its net profit fall 1.4 percent on-year to 940.3 billion won ($813.5 million) in the third quarter.

KB Financial's net interest margin - a key barometer of profitability - decreased 0.02 percentage point from three months earlier to 1.94 percent at the end of September.