BNK establishes mobile banking service

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BNK establishes mobile banking service


Sung Se-whan, BNK Financial Group’s chief executive officer, emphasizes that he will find various ways to expand its operations by finding new markets. [SHIN IN-SEOP]

BNK Financial Group co-established a mobile banking service called Sumbank with its largest shareholder Lotte Group last month.

Its customers can use BNK Busan Bank’s 160 or so ATMs and 6,000 Lotte ATMs located without having to have their debit cards with them.

Sung Se-whan, BNK Financial Group’s CEO, said in his interview with JoongAng Ilbo earlier this month that he will be able to attract more customers through the mobile banking service since it doesn’t have limitations on location. Currently, most of the BNK banks are located in Gyeongsang Province, so the number of branches is relatively low compared to other big-sized financial institutions.

“Sumbank will be the new growth engine for BNK,” said Sung.

The app will allow customers to open up security accounts with Yuanta Securities and enjoy its robo-advisor, or online wealth management service. Depending on their trade performance, customers are also eligible to receive Lotte Member’s L.Point. L.Point is a point or mileage-based card that awards users discounts in certain stores.

BNK Financial Group is growing very rapidly. BNK became the fifth largest financial institution following KEB Hana Financial Group, Shinhan Financial Group, KB Financial Group and NH Financial Group after the group successfully acquired Kyongnam Bank in 2014.

BNK’s total assets reached over 100 trillion won ($86.8 billion) last year. This was the first time for the non-Seoul based financial institution to do so.

Sung was chosen to serve for a second term, or until 2019, at a meeting of stockholders held last month. Shareholders thought highly of Sung’s ability to manage the group and the recent improvement in the group’s performance.

Sung said BNK was finally able to compete with major financial institutions after acquiring Kyongnam Bank. However, he added that he had lots of worries after the acquirement since the bank’s financial situation was not that great.

Kyongnam Bank’s net interest margin (NIM) was at 1 percent, one of the lowest for local banks. Moreover, Kyongnam’s delinquency rate was 0.94 percent, the highest among banks, at the time when BNK acquired it.


But the newly transformed Kyongnam Bank’s NIM rose to 2.1 percent, and its delinquency rate fell to 0.6 percent, as of the end of last year. This was largely thanks to BNK’s decision to make some changes to loan requirements and focus on making more profits.

Kyongnam has become somewhat stable, but the asset quality of BNK Financial Group as a whole has weakened. For example, Bank for International Settlements (BIS) capital adequacy ratio for BNK has dropped.

Under the so-called Third Basel Accord, or Basel III, Korean banks will have to raise their minimum BIS capital adequacy ratio limit to 9.5 percent by the beginning of 2019. In order to meet this goal, BNK raised 472.5 billion won through stock issuances, increasing the ratio up to 8 percent.

“BNK will be able to meet the goal by 2018 if we continue to save our assets,” said Sung.

Sung added that BNK will actively look for merger and acquisition opportunities. BNK tried to acquire United Asset Management Company (Uamco), an asset investment firm, last year. However, the deal was never completed, as the government converted Uamco into a company specializing in corporate restructuring.

“We will consider doing M&A if an insurance company or securities firm is for sale,” said Sung.

Sung is also looking for ways to enter foreign markets. BNK opened a branch in Qingdao, China, in December 2012. The Qingdao branch finally began making a surplus in 2014, and received the Chinese government’s certification to do financial business using yuan in the same year.

BNK opened an office in Ho Chi Minh City, Vietnam, in 2011 and the group will turn it into a branch later this year.

“We are trying to make China and some Southeast Asian regions, where so many Gyeongsang companies have already gone, our new growth engine,” said Sung.


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