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| Hana Financial Group Chairman Kim Jung-tai. Courtesy of Hana Financial Group |
This is the second in a series of written interviews/surveys of chairmen of Korea's major financial groups. ― ED.
By Park Hyong-ki
Hana Financial Group is actively looking for opportunities to invest in emerging markets where it can boost the presence and growth of its nonbanking businesses, said Kim Jung-tai, chairman of the listed financial holding company.
The group specifically has its eyes on Indonesia, Vietnam, the Philippines, India, China and Russia.
This comes as the group has been highly reliant on its bank for growth. KEB Hana Bank's profit contributed to about 90 percent of the group's consolidated net profit in the first half of the year.
It would further make inroads into those markets with its nonbank subsidiaries such as Hana Financial Investment and Hana Card by setting up entities, making equity investments in local companies or pursuing acquisitions.
"We have our eyes on those emerging countries with high growth potential where the group can create new businesses in investment banking and money markets," said Hana Financial Chairman Kim in a written survey by The Korea Times.
"The group will move forward with globalization with its organic and inorganic growth strategies in line with Hana Financial's vision."
The chairman added the vision is generating 40 percent of its total profit before tax from its overseas ventures by 2025.
Under the "One Company" initiative, the group seeks to beef up its nonbanks overseas in order to strike the right balance in its businesses between them and KEB Hana Bank.
To this end, the group is looking to have its nonbanking profits account for 30 percent of the 40 percent coming from the group's ventures abroad.
Hana's 2025 vision also includes further solidifying KEB Hana Bank to be the No. 1 commercial bank here.
Hana Financial has more than 22 trillion won ($20 billion) in cash available for overseas expansion, according to its semiannual financial report. Its biggest shareholder is the National Pension Service with a 9.55 percent stake. More than 70 percent of the group shares are held by foreign investors. Its market cap stands at 12.7 trillion won.
KEB Hana Bank has expanded its presence in Indonesia, Vietnam, India and China, according to the Korea Federation of Banks.
The group will be able to use the overseas networks of KEB Hana Bank to boost its investment banking and credit card units.
"The group ultimately seeks to create a stable portfolio and become one of the five most trusted financial brands in Asia, excluding China, via globalization and synergy among its subsidiaries," Kim said.
"The vision would help the group to develop a sound governance structure as well."
Digitalization
The chairman said the group will, foremost, have to become a "trustworthy and agile digital company" before it becomes a "true global company."
This is why it is speeding up its digital transformation much faster than its 2025 global plan as it will soon enter the Fourth Industrial Revolution.
By adopting an open innovation model, the group and its subsidiaries are creating open-source platforms using artificial intelligence technology and seeking to provide services tailored to their customers.
Thus, Hana Financial's digital goal is to become a financial information and technology company with its key focus on using data to provide a better customer experience, Kim said.
And it wants to be digitally ready by 2020.
"We recognize data as a valuable asset, which will enable the group to develop key infrastructure for data management, analyses and visualization," Kim said.
"In order to achieve this, our organization will be adopting the open innovation model."
The model will not only push Hana Financial and its subsidiaries to change their organization but also join forces with tech startups beyond the conventional financial sector to identify and solve problems, the chairman said.
In June 2015, Hana Financial launched 1Q Agile Lab where it and startups can test and commercialize their ideas.
Hana is currently assisting 44 startups in the lab to develop and implement their business models, and attract investors.
"Eventually, we seek inclusive financial growth in which we can grow with our customers and partners such as startups and medium-sized enterprises," Kim said.
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