South Korean commercial banks are actively expanding their presence in the Eastern European market, driven by the increased participation of major domestic companies in the region, resulting in a growing demand for corporate finance. Moreover, recognizing the limitations of relying solely on Southeast Asia for global revenue expansion, domestic banks are proactively seeking new breakthroughs.
In November 2023, Hana Bank signed an MOU with Germany’s Commerzbank to strengthen global corporate finance in the European region. This collaborative effort aims to enhance various areas such as fund procurement, foreign exchange operations, and trade finance. Analysts interpret this move as Hana Bank’s effort to solidify its position in the emerging Eastern European market, leveraging Germany’s role as a hub for managing the financial requirements of Korean enterprises in the region, given its housing of the European Central Bank (ECB) and European headquarters for Korean companies.
Woori Bank unveiled its global strategy just a month before Hana Bank’s MOU with Commerzbank, designating Poland as its upcoming global hub. With an office established in the Katowice region in 2017, negotiations are currently underway with Polish financial authorities to upgrade this office to branch status. Additionally, KEB Hana Bank inaugurated an office in Wrocław, Poland, in May last year, marking approximately five years since the initiation of its business expansion efforts into Europe.
The proactive entry of domestic banks into Eastern Europe is driven by the overarching goal of broadening their global footprint and increasing non-interest income. This expansion is seen as a strategic response to constraints recognized by the financial industry, acknowledging the need to diversify beyond Southeast Asia for sustained global revenue growth. Korean banks, equipped with a profound understanding of Korean businesses, actively seek collaboration with financially robust foreign banks in the region to leverage synergies. This strategic move aligns with the anticipation that Eastern Europe will emerge as a pivotal hub for global business expansion.
A high-ranking official in the banking sector explained, “In Eastern Europe, Korean conglomerates have significantly expanded their presence in industries like secondary batteries, batteries, and defense. European banks, lacking information about Korean companies, are seeking MOUs or loan syndication with Korean banks as a means of collaboration.”
