KB ramps up presence on mainland
KB Kookmin Bank, the flagship of one of the nation’s leading financial institutions KB Financial Group, is taking its first step toward tapping the mighty Chinese market.
Including KB Financial Group Chairman Euh Yoon-dae and the bank’s president, Min Byung-duk, some 400 officials from China and Korea attended a ceremony in Beijing yesterday to mark the opening of KB Kookmin Bank’s first local subsidiary in China, and its first branch in the Chinese capital.
The Korean financial group also held a forum with Chinese scholars to discuss a range of issues including possible ways of cooperating on financial and currency matters as well as free trade agreements.
“In the two decades since Korea and China have resumed trade they have made outstanding progress, with two-way trade growing 36-fold to $220 billion a year,” KB Financial Group Chairman Euh Yoon-dae said. “However, unlike the manufacturing sector, exchanges in the financial sector have been relatively small.”
He added that “in the interest of developing both sides’ financial industries, human networks need to be expanded and ideas and opinions actively exchanged with the aid of meetings between economic leaders.”
He described the opening of the new branch and subsidiary as “stepping stones” for such development.
Min said expanding into China is essential for the group’s future growth.
“We plan on strengthening our sales, not only to Chinese companies but also to retail clients through aggressive forms of localization,” he said.
To achieve its goal, the Korean bank will follow a three-point plan, he said. First, it will focus sales on Koreans residing in China, as well as Korean companies that operate in China; second, it will center its sales to Chinese companies; and third, it will target local retail customers and private banking services.
“For successful localization, it is essential to run the local subsidiary using local employees,” Min said. “We plan on putting Chinese in charge of sales, and will probably hire a local to head the branch, while we ourselves will focus on areas like risk management.”
In terms of cooperating with local banks Min said, “apart from forming strategic alliances, there are other possible routes such as pursuing mergers and acquisitions though stake holdings.”
KB Kookmin Bank now has four branch offices, including one in Guangzhou, in southern China, another in Harbin, in the northeast of the country, and a third in Suzhou, near Shanghai.
It plans to open at least two more in the near future, one in Shanghai and another in Qingdao, in Shandong Province.
The Korean lender now has four subsidiaries overseas, including ones in London, Hong Kong and Cambodia.
By Lee Ho-jeong [email@example.com]
More in Finance
Kospi sets another all-time high as optimism continues
Kim Kwang-soo named as sole candidate to head banking federation
Kospi hits record 2,602.59 as optimism continues after U.S. election result
Dollar deposits jump as punters bet on currency's rebound
Reservation app operator Yanolja to go public next year