Financial companies look overseas as crisis subsides

JoongAng Daily
http://joongangdaily.joins.com

Firms are restarting plans the crisis put on hold.

May 06, 2009

Korean financial companies are resuming overseas investment plans suspended at the breakout of the global financial crisis late last year.

KB Financial Group said in a regulatory filing on Monday that its flagship company, Kookmin Bank, had purchased a stake of over 51 percent in Khmer Union Bank of Cambodia and changed its name to Kookmin Bank Cambodia.

The Cambodian unit, with 17 billion won ($13.34 million) in current assets, was set up in July 2008 as a joint venture of several Korean manufacturers including Taihan Electric Wire and Posco Engineering and Construction to handle transactions with their subsidiaries and branches in the Southeast Asian country. Kookmin Bank, Korea’s No. 1 lender, plans to extend the unit’s customer base from local companies to Cambodian individual investors by introducing private banking and other retail services, Kookmin officials said.

KB also plans to increase its stake in Bank CenterCredit of Kazakhstan, as Kim Jung-hoe, the group’s president, said in an investors’ briefing last week. He said the group will spend about $120 million to purchase an additional 6.2 percent of BCC before the end of May. That will make the Korean group the largest shareholder in Kazakhstan’s No. 6 lender, with a 36.8 percent stake. The company plans to increase its holdings to up to 50.2 percent by 2011.

Shinhan Bank, the nation’s second-largest lender, said last week it had won provisional approval from Japan’s Financial Service Agency to establish a banking subsidiary in the country later this year. If the Korean financial company obtains final approval, it will set up the subsidiary in the third quarter, becoming the second foreign lender after Citibank to have a banking unit in the country, the group said.

Insurers are also going overseas. Korea Life Insurance, the second-largest local life insurer, opened three branches in Vietnam last month, a first for the local industry.

“These times of economic difficulties give chances to enter markets pre-emptively,” said Hyeon Jeong-seop, head of the insurer’s Vietnamese subsidiary. Korea Life targets a 5 percent market share and $35 million in annual premiums by 2013.

Samsung Life Insurance, Korea’s largest, opened an office in Singapore early last month as a beachhead in Southeast Asia, the firm said.

By Kim Joon-hyun, Moon So-young [symoon@joongang.co.kr]