SEOUL, May 27 (Yonhap) -- South Korean banks are further turning their focus to the Asian market as squeezed profit margins and the economic slowdown at home are prompting them to find new sources of income, market watchers said Monday.
Local banks' move to tap the overseas market is not a new trend, but top lender Kookmin Bank and its three major rivals are ramping up efforts to make inroads into the Asian market where economic growth remains relatively solid, they added.
Top lender Kookmin Bank is aiming to provide tailored services to local residents and engage in project financing in overseas markets after expanding sales channels, officials added.
Kookmin Bank is preparing to open an office in Myanmar after recently getting the green light from regulators, they added. The bank also set up a wholly-owned subsidiary in China and opened an office in Beijing in 2012, bringing the number of its overseas units to 16.
No. 3 industry player Shinhan Bank is also seeking to raise the portion of overseas income to around 10 percent by 2015 from the current 6.3 percent, officials said.
Shinhan Bank is awaiting regulatory approval from the Indonesian authorities to take over a 40 percent stake in Bank Metro Express, officials said. Shinhan Bank has 65 overseas units including subsidiaries and offices.
Woori Bank said it is making efforts to strengthen overseas networks by nurturing employees who are equipped with communication and business skills. With 62 overseas operations in 17 nations, Woori Bank is targeting to grow into one of Asia's top 10 lenders by 2016.
No. 4 player Hana Bank added that it plans to increase the portion of its overseas assets to 10 percent of total assets by 2015. It also said that it is seeking to generate 15 percent of its net profit from overseas units by the same year.
The move came as local banks have already suffered from weak earnings in the first quarter as their profit margin has been on the decline amid the central bank's easing cycle.
South Korean banks' combined earnings fell 45 percent on-year to 1.8 trillion won (US$1.6 billion) in the first quarter as their interest income declined on the falling trend of interest rates, according to data by the Financial Supervisory Service.
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