Korea: Local commercial and state-run lenders expand presence in Central Europe
Local commercial and state-run lenders are rushing to establish offices in Poland and Hungary, buoyed by rapid growth of integrated economic activities between Korean businesses and their Central Europe peers, market watchers said Sunday.
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| A composite image of Korea's commercial lenders - KB Kookmin, Shinhan, Hana and Woori / Korea Times file |
Chief among them are car and battery manufacturing, Korea’s growth driver industries seeking to make greater strides in the European market together with their smaller partner firms making automotive parts and rechargeable equipment. Industry leaders with production facilities there include Hyundai Motor and its sister firm Kia, LG Energy Solution, Samsung SDI and SK On.
Further brightening Korea’s prospects is the growth of defense industries in the region, as best encapsulated by Korea’s over 9 billion won ($6.6 million) worth of defense exports to Poland last year. The 14.8 percent year-on-year increase pushed up Poland as Korea’s fifth surplus-generating trading partner, up from the previous seventh.
Korea’s leading commercial lenders aim to provide a combined financing of 10 trillion won to facilitate the country's arms equipment exports to Poland to the tune of 47 trillion won. The deal signed last year will be mediated primarily by the state-run Export-Import Bank of Korea (Eximbank) and Korea Trade Insurance Corp (K-Sure).
The expanded presence will help Korean entities join nearby Ukraine's post-war reconstruction projects anticipated to be worth about $750 billion in total.
Hana Bank opened an office in Budapest, Hungary’s capital, March 21 (local time).
Hungary has the world’s fourth-largest battery manufacturing facilities, with a steady inflow of significant foreign capital tied to rechargeable businesses.
The European country is an investment destination for Korea, since the quality of labor relative to cost is high. Also factored in is its geographical advantage of bordering seven other European countries, including Austria.
The Budapest office raises the number of the bank’s global financial networks to 26. Hana also plans to open channels in India and Poland.
Last week, Hana signed a strategic partnership with the Credit Agricole Corporate and Investment Bank of France, to strengthen cooperation in investment banking, treasury, trade financing and environmental, social and corporate governance (ESG) financing.
“The opening of the Budapest office and partnerships with Credit Agricole will strengthen our European network,” a Hana Financial official said.
KB Kookmin Bank plans to establish a Korea desk in Poland, underpinned since 2022 by its partnership with Warsaw-headquartered Bank Pekao.
The two maintain close cooperation in sharing and recommending corporate clients, providing joint services of guarantees, letter of credit and trade financing.
Shinhan Bank opened its office in Poland in 2014 and state-run Industrial Bank of Korea opened its office in 2023. Woori Bank also has an office in the country.
The financial authorities are drumming up efforts to advance the local lenders’ initiatives.
Financial Services Commission (FSC) Chairman Kim Joo-hyun returned from a four-day trip to Poland last week. He was the first top financial regulator to visit the country.
Kim met with his Polish counterpart for the first high-level meeting between the top financial regulators of the two countries.
He pledged a strong commitment to providing financial assistance to high-profile cooperation projects encompassing defense, nuclear energy and infrastructure.
“Poland established diplomatic relations with Korea in 1989 and the bilateral relations have since strengthened, especially after the Korea-Poland summit last July,” Kim said.
An increasing number of Korea’s financial and business entities are seeking a greater presence in Poland, with Polish authorities exhibiting growing interest in Korea’s finance industries, he added.
“The government will seek cooperation with Poland in facilitating the approval of licensing for banking businesses,” the FSC chairman said.
The Korea Federation of Banks held a seminar with Poland on March 25 to fortify joint cooperation in financial industries and promote financial market knowledge sharing and employee training.
(Source: Korea Times)
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