Asia: Encouraging offshore expansion for Korean banks

The Cabinet recently approved the revision of the Enforcement Decree of the Banking Act bill to ease regulations for South Korean banks opening physical offshore units.

Prior to the revision, banks had to report if either the bank’s BIS capital adequacy ratio stood below 10 per cent of if the foreign country’s credit rating was below B+.

Following the revision, banks will only need to report before setting up foreign offices or branches when investment exceeds 1 per cent of capital. Removing the rigmarole of reporting will help banks move swiftly into new markets at a time when many Korean banks are looking abroad.

There are many banks in Korea which have already made their mark overseas, such as Shinhan Bank which recently acquired ANZ’s retail banking arm in Vietnam.

According to RFi Group data, 2% of the banked population now holds a product with them.

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