South Korean lenders are moving increasingly abroad to avoid regulations and stiff competition at home.

Korea’s five major banks – KB Kookmin, Shinhan, Hana, Woori, NH NongHyup – ran a total of 1,440 foreign outposts as of late September, a huge jump from 844 in 2019.

Overseas expansion has picked up pace from previous years when the numbers rose from 630 in 2017 to 797 in 2018.

Meanwhile the banks are downsizing at home, with the number of local outlets down to 4,538 from 4,728 three years ago.

The trend has been driven largely by local regulations.

Consumer loans have tightened following the Moon Jae-in administration`s all-out attempts to tame the housing market. The government has unleashed 23 real estate policies over the past three years, with many of the actions aimed toward tightening loan conditions.

The record-low interest rates and the coronavirus outbreak have dealt additional blows, bringing the net profit of the five major banks down by 15 percent in the first half of this year to 4.88 trillion won ($4.31 billion).

The pandemic crisis has also increased M&A opportunities in the Asian market.

KB Kookmin Bank has been the most aggressive in expanding its foreign network, snatching up financial firms in Cambodia and Indonesia this year. Its acquisition of Indonesia’s Bank Bukopin in August is said to have come through after Indonesian regulators eased the 40 percent limit of foreign stake in local financial firms.

Such relaxed conditions have fueled the global foray. Korea’s five major banks saw their offshore M&As and equity investments surge to 1.09 trillion won by September this year from 102.7 billion won in 2018.

By Moon Il-ho and Kim Hyo-jin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]