By Park Hyong-ki
Regional financial groups are looking to expand further in Southeast Asia as the local market is getting smaller and more crowded, industry sources say.
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| DGB Chairman Kim Tae-oh |
DGB Financial Group is preparing to open a bank branch in Vietnam as 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.
Shinhan Bank made inroads into Vietnam in 1993 and became the largest foreign-invested bank following its acquisition of ANZ Vietnam's retail banking division in 2017.
JB Financial Group is also seeking a fresh start in Southeast Asia, it said.
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| JB Chairman Kim Ki-hong |
With its flagship Jeonbuk Bank, the group acquired Cambodia's PPC Bank in 2016 to provide loan services to local retail customers and small- and medium-sized enterprises.
"We started looking abroad then in an effort to foray into new overseas markets," a JB spokesman said.
JB Financial Group also has Kwangju Bank.
BNK Financial Group, which has Busan Bank, has also been eyeing expansion in Southeast Asia since 2016 when Busan Bank opened a branch in Vietnam, it said.
The group's BNK Capital has entered Myanmar and Cambodia's microfinancing and leasing.
"We are kicking into gear backed by the country's strengthened ties with Southeast Asia," a BNK spokesman said.
BNK Financial Group aims to generate 5 percent of its total annual profit from its overseas ventures by 2023, the group said.
The government is looking to set up a Korea-ASEAN finance support center either in Bangkok, Thailand, or Jakarta, Indonesia, next year.
It is also seeking to support local financial companies to create ecosystems in the region through ties with financial tech startups.
There are 164 branches and offices of Korean financial companies in Southeast Asian markets, including three in Thailand, according to the Korea Federation of Banks.
Regional banks are facing a number of domestic challenges as Seoul-based financial groups' flagship lenders have increased their presences in their backyards, industry sources say.
"Also, an economic slowdown is making regional banks turn their sights toward new potential growth markets abroad," an industry source said.
