April 27, 2024

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[THE INVESTOR] Three European financial firms -- Royal Bank of Scotland, Goldman Sachs International and BBVA -- have decided to halt banking services in Korea, joining a slew of foreign banks here that have reduced or shut down local operations in recent years.

The Financial Supervisory Commission said on June 14 it has approved the closure of their banking operations. The companies have also reached agreements with their employees, the financial watchdog added. 

UK-based Goldman Sachs International said it is closing the banking division to save duplicated costs and will maintain business in Korean through the securities branch.

BBVA, Spain’s second-largest bank, also plans to set up a new local office that monitors the Korean financial market.

“Foreign banks are reducing their Korean operations. They are making efforts to cut costs and improve profitability overall largely due to the deteriorating business environment back home,” said an FSC official.

“While some European banks are leaving, others, especially those from Asia such as China’s Everbright and India’s SBI, are eyeing to enter the Korean market,” he added.

After their departure, the total number of foreign banks here will decrease to 40. Earlier, UBS and Barclays also announced they would withdraw from the market and apply for FSC’s approval.

By Park Ga-young (gypark@heraldcorp.com)