4 major financial holdings to target global market, leadership in ‘joy & sorrow’

[ Cho Eun Guk ceg4204@ ] | 2018-02-14 11:09:39
The four major financial holding companies in Korea are moving away from the Korean market, which is the Red Ocean, and are accelerating their entry into the global market. All four major financial holders are expected to focus their core management goals on expanding the global market, and Southeast Asia will become a battleground for competition among domestic financial institutions. Among the four financial holding companies, Shinhan Financial Group and Hana Financial Group, which have already established networks in key areas, are making meaningful results in the global business. On the other hand, KBFG and Nonghyup Finance are crossing sharply as they focus on expanding global infrastructure.

According to the Financial Sector on February 13, Shinhan Financial has 178 networks in 20 countries and has the widest global network among the four largest financial holdings in Korea.

Shinhan Bank operates 158 networks in 20 countries, including corporations and branches, Shinhan Card (12 networks in 3 countries), Shinhan Investment (6 networks in 5 countries), Shinhan BNP Paribas Asset Management 1 network in 1 country) and Shinhan Life (1 network in 1 country) are expanding their operations through overseas subsidiaries and offices.

On the other hand, Hana Financial Group operates 158 networks in 24 countries around the world and has the second largest overseas network following Shinhan Financial Group. KEB Hana Bank is establishing a network of 146 (24 countries), and Hana Financial Investment Co., Ltd. (2 networks in 1 country) and Hana Capital (10 networks in 1 country) are also pioneering overseas markets.

Both Shinhan Financial Group and Hana Financial Group are building an extensive network in Asia. Shinhan Bank operates 68 stores in Indonesia through banking, financial investment, and credit cards, and has 29 and 18 stores in Vietnam and China, respectively. It has the largest infrastructure in the Chinese and Indonesian markets, based on the overseas bases established during the period of the KEB. Currently, there are 31 branches in total in China, and 60 branches in Indonesia.

Despite KBFG and Nonghyup Financing have pushed into overseas markets in recent years, Shinhan Financial Group and HFG are still in a big gap. KBFG has entered overseas markets for a while due to the failure of BCC investment in Kazakhstan. Nonghyup Finance has been making efforts to advance into the global market since its transition to financial holding company system after the nervous separation in 2012.

KB Financial Group currently has 40 overseas networks in 13 countries through banks, securities, non-life insurance, card and capital. The bank is building 23 networks centering on China, Myanmar and Cambodia, and has 10 overseas branches and 4 overseas branches, respectively.

NACF operates 14 networks in nine countries. Unlike other financial holding companies, Nonghyup Finance has more overseas network of securities firms than banks. Currently, NH Investment & Securities operates eight stores in seven countries and NH Cooperative Bank operates five stores in five countries.

There is a big gap in profits earned through global business. In the case of Shinhan Bank given the large gap in overseas infrastructures among financial holding companies, total revenues of KRW 1.71 trillion last year were only KRW 235 billion in the global business. It accounted for 14% of the net profit of the whole bank, and it became a core business. In addition, KEB Hana Bank, a subsidiary of Hana Financial Group, recorded a net profit of KRW 340.7 billion in the global business, accounting for 16% of the total net profit of KRW 2.03 trillion. On the other hand, Kookmin Bank earned KRW 23.4 billion in overseas stores last year, and the net profit of Nonghyup Finance is only KRW 14 billion by 2016.

An expert from the financial sector said, "Financial holding companies are leading the overseas market in terms of growth strategy." "It is expected that profitability will be boosted if we take advantage of the saturated financial market and take advantage of the growth potential of Southeast Asia." said. "Although KB Financial Group and Nonghyup Finance are relatively weak in overseas infrastructures, they are expected to expand their market through overseas M & A," the expert stated.

By Cho Eun Guk ceg4204@

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