The Investor
South Korea’s Financial Supervisory Service urged financial institutions based in
Korea to foster a “long-lasting relationship” with Southeast Asian countries in a
closed-door seminar held April 19.
At an event joined by representatives of 16 Korean financial institutions at the
Conrad Hotel in Seoul, FSS First Senior Deputy Gov. Yoo Kwang-yeol stressed the
significant role Korean financial firms play in localizing offshore units in
Southeast Asian nations that contribute to the advancement of the region’s
financial industry.
“(Financial institutions in Korea) should highlight their role as a partner for
mutual benefit and common prosperity (in Southeast Asian countries), instead of
regarding them as a market for higher profit margins,” Yoo said in his closing
speech at the seminar.
He added that the institutions’ units in Southeast Asia should try to offer
financial services that better meet the needs of local customers, and that they
should hire more local experts to contribute to the regional economy.
The financial watchdog also discussed what its officials had learned from meetings
with financial authorities in Thailand in November, Malaysia in December, and
Cambodia, Indonesia and Vietnam in March.
“Financial regulators in Indonesia and Vietnam were interested in the way the FSS
oversees financial technologies, cryptocurrencies and peer-to-peer lending
services, as well as oversight on cybercrimes,” Yoo said. “They also asked for FSS
assistance to improve their macroprudential regulation and revise rules for
brokerages and insurers.”
Korean financial institutions are expanding their presence in Southeast Asian
countries amid the government’s “New Southern Policy” initiative, involving a
bigger focus on the region.
As of end-2018, financial institutions in Korea -- banks, brokerages, asset
management firms, insurers, nonbank lenders and holding firms -- operated 52
entities in Vietnam, 25 in Indonesia, 21 in Myanmar, 18 in Singapore and 14 in
Cambodia, among others.
For domestic banks, their assets for business in Vietnam rose 12.4 percent to $6.4
billion on-year as of end-2018, while those for Indonesia soared 10.1 percent to
$6.3 billion, according to FSS data. Their net income in Vietnam more than doubled
on-year to $131.8 million in 2018, while their net income in Indonesia slipped
13.3 percent to $87.1 million.
This comes in sharp contrast to the lack of Korean presence in the financial
sector in other major Southeast Asian countries like Thailand and Malaysia.
According to FSS estimates, Thailand housed three overseas offices of Korean FIs,
while Malaysia had only two units.
Thailand, the second-largest economy in Southeast Asia, has yet to allow the entry
of Korean FIs since the 1997 financial crisis, when commercial banks like Shinhan
Bank and Korea Exchange Bank -- now merged with KEB Hana Bank -- exited despite
the government’s request to stick around. This is coupled with Thailand’s current
regulations which prevent banks of non-ASEAN countries from opening a branch.
By Son Ji-hyoung ([email protected])
http://www.theinvestor.co.kr/view.php?ud=20190419000560