April 26, 2024

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[THE INVESTOR] Leaders of major financial institutions in South Korea vowed to fight challenges and seek growth beyond the country in their New Year’s speeches released on Jan.2. 

The new year is full of political and economic uncertainties at home and abroad, making Korea’s sensitive financial market much more unpredictable.  

Woori Bank CEO Lee Kwang-goo (center) and employees gesture for their New Year's pledge in front of the bank's headquarters in central Seoul on Jan. 2. Woori Bank

Ongoing industrial restructuring activities are expected to be a major burden for local financial institutions, costing them at least 10 trillion won ($8.28 billion), while commercial banks will have to hunt for new sources of profits amid overheated competition in the domestic market. 

As low interest rates are forecast to persist through 2017, financial players’ challenge of raising returns will only grow this year.  

Lee Dong-geol, chairman of the state-run Korea Development Bank, pledged to restore the policy bank’s status and enhance its role in 2017. 

“As a public financier, the KDB should help restart the growth engine of the Korean economy,” Lee said. “KDB will complete the ongoing restructuring activities in the shipping and shipbuilding industries, contributing to stabilizing the economy.” 

KDB will provide a total of 62.5 trillion won for midsize firms and newly rising industries this year, in an attempt to revitalize the economy, the chairman said. 

On the global business front, the Korean policy bank will strengthen its operations in Southeast Asia and enter new emerging markets to bring new profits. 

Woori Bank CEO Lee Kwang-goo stressed that 2017 is a crucial year for the bank to renew itself as a true private bank and set a distinct goal to become one of the top 10 banks in Asia and top 50 across the globe. 

“Taking privatization as a big opportunity, Woori Bank will expand its financial territory by using the vast global platform and make another leap (forward) as a comprehensive financial group,” Lee said.   

The CEO proposed five new growth engines for the bank to overcome expected challenges and become stronger. 

“The bank will establish a new business portfolio targeting higher profits and strengthen the asset management business with an aim to show a significant achievement in terms of returns,” he said. 

Woori Bank will continue expanding its mobile platform that connects customers’ financial lives with health care, shopping and education, by offering some “killer content.” 

For the growth of its global business, Woori Bank will provide more localized financial services through its 250 overseas branches and offices, while enhancing its investment banking business this year, Lee said. 

Kim Jung-tai, chairman of Hana Financial Group, the holding company of the country’s largest KEB Hana Bank, highlighted the “organic growth” of its mobile platform business in an era of infinite competition for financial technology, or fintech. 

“Banking is necessary. Banks are not,” Kim quoted Bill Gates as saying, “Financial institutions are facing competition beyond the market in order to satisfy smart users.” 

The group will continue developing a lifestyle-based financial platform and reach global customers, offering them new value-added financial services, the chairman said. Its mobile platform Hana Members will enable point exchanges across the globe this year, suggesting a true global mobile platform. 

Shinhan Bank CEO Cho Yong-byoung put emphasis on innovation and “glocalization” foreseeing a new banking industry reshaped by the appearance of online banks and fintech firms. 

“We can go forward only if we change everything else but the Shinhan spirit amid the coming changes in the fourth industrial revolution,” Cho said. “Digital transformation and glocalization will be our top priorities.” 

Mirae Asset Group Chairman Park Hyeon-joo emphasized that “investment” is the DNA of his financial group and it will continue investing in the future despite the myriad challenges ahead. 

“Dreading economic challenges will not bring us future,” Park said. “Mirae Asset will seek growth for another 10 years by continuing to invest for our customers for a better future.” 

This year, Mirae Asset marks the 20th anniversary of its foundation. 

Park also highlighted the pension business as having the largest growth potential in the Korean capital market. 

“The focus of the pension market will shift from savings to investment due to low interest rates and growing life span,” he said. 

The group will boost the competitiveness of its retirement-related products, consultation and asset allocation for its pension business. 

“Mirae Asset will have the mission of contributing to the wellness of the post-retirement lives of our customers through investment,” he said. 

By Song Su-hyun/The Korea Herald (song@heraldcorp.com)