Date
2011.08.23
No. 3 industry player Shinhan Bank is currently in talks with lenders in Indonesia for a joint investment to buy one or two Indonesian banks within this year, the sources said.
Indonesia, the world's fourth most populous country, has the fourth-largest number of South Korean small and medium enterprises after China, the United States and Vietnam.
The bank, which operates a joint venture capital company in Indonesia, will also open a branch in Hunan Province, China, later this year, according to the sources.
The state-run Industrial Bank of Korea (IBK) is set to start business in China this month and Indonesia in the near future. It is also pushing to open branches in Vietnam and India, they said, adding IBK is conducting a feasibility study on entering the Indonesian market.
Woori Bank, the No. 2 lender in South Korea, recently opened a branch in St. Petersburg, Russia's second-largest city, three years after the establishment of a wholly owned subsidiary in Russia.
Industry leader Kookmin Bank is poised to establish a branch in Osaka, Japan, while considering opening a representative office in India's Mumbai and Hanoi of Vietnam.
Korea Exchange Bank, South Korea's No. 5 lender controlled by private U.S. equity fund Lone Star Funds, is pushing to set up a branch in Abu Dhabi in the United Arab Emirates, in a bid to tap into the Middle Eastern market, according to the sources.
The banks' overseas push comes as snowballing household loans in South Korea have been dragging down their profits, while it is also designed to meet government demands for cutting their dependence on the U.S. and Europe for foreign currency borrowing, they said.
As of the end of June, the country's household debt reached a record high of 876.3 trillion won (US$809 billion). Currently, nearly 60 percent of local banks' foreign loans come from the U.S. and Europe.
Source: Yonhap News (August 23, 2011)