Advertisement
Advertisement

Woori opens investment banking business in Hong Kong

Woori Bank, a unit of South Korea's third-largest financial services company, has set up an investment banking arm in Hong Kong, targeting potential clients in Asia, the Middle East and other fast-growing emerging markets.

Observers said the entry of Woori Global Markets Asia reaffirms Hong Kong's reputation as a favoured location for South Korean lenders and as a stepping stone to more business opportunities in the region.

Hwang Young-key, chairman and chief executive of Woori Financial Group, said fierce competition in the domestic market in South Korea was one reason that prompted the bank to look overseas for expansion.

'For [the bank] to continue to grow and to be profitable, you have to find new [sources of] revenue,' he said.

Mr Hwang said Woori Bank already has a branch in Hong Kong to serve its Korea clients. By setting up an investment banking arm, the bank will be able to further expand its presence overseas.

It is the bank's first attempt to compete with players such as Citigroup and Goldman Sachs in the global market.

Mr Hwang said Woori Global Markets aims to become a leading investment bank in Asia in five years. It plans to expand through acquisitions, targeting companies that specialise in asset management and private equity business, to complement organic growth.

'We will try to achieve revenue of US$100 million in five years in this market,' he said.

Lee Seok-ho, a director at financial institution group at Fitch Ratings, said South Korea banks are ready for international expansion after improving management and profitability in the wake of the Asian financial turmoil in 1997 and 1998.

'As the domestic market in South Korea is mature and competition is intense, some banks are starting to look at business opportunities in offshore markets,' Mr Lee said.

'They like Hong Kong because as a leading international financial centre in the region, it's a stepping stone.'

Shinhan Financial Group, the second-largest financial services company in South Korea, has also opened an investment banking unit in Hong Kong. 'If these two leading South Korean banks in Hong Kong succeed in achieving progress, they will prompt other lenders to follow in their footsteps,' Mr Lee said.

Post