Korea's Hana Bank to promote foreigners as managers in overseas units

South Korean banks are set to reshuffle overseas units by promoting local staff to management positions, in a bid to boost the sluggish profitability of their overseas operations.

Hana Bank, South Korea’s No. 2 lender by assets, plans to appoint outstanding locally hired staff in other countries as branch heads or as relationship managers, client-focused professionals who advise customers on investments and financial services, according to industry sources in Seoul on Monday.

The lender expects management-level talent from local staff pools abroad to improve the competitiveness of its overseas business more than managers transferred in from Korea, the sources said.

“The measure is intended to strengthen the global management system centered on local talent,” said a Hana Bank official. “These talented professionals will be the driving force for Hana Bank to escalate its position in the global market.”

Korean banks usually send managers from headquarters to supervise their overseas units.

Hana Bank, the flagship unit of the country’s third-largest financial holding company Hana Financial Group, has enhanced training programs for overseas staff to include a program to allow select foreign staff to work at its Seoul headquarters for six months.

For example, an employee from Indonesia is working with the headquarters' foreign exchange department to improve the bank's remittance system between the two countries.

TO RESHUFFLE KOREAN EXECUTIVES AT OVERSEAS UNITS

Woori Bank, meanwhile, plans to reshuffle executives of overseas units after the country's No. 4 lender lost competitiveness after deploying high-ranking officers abroad, financial industry sources said.

In March, the flagship unit of Korea's fourth-largest holding company Woori Financial Group Inc. fired the head of its global business.

“Woori Bank aims to reform its practice of appointing executives as overseas unit heads before their retirement,” said a source. “The bank is expected to seek a major generational shift through the scheduled year-end executive reshuffle.”

Shinhan Bank, the lending unit of the country’s second-largest financial holding company Shinhan Financial Group, is poised to focus on its global business to maintain its position as the Korean bank with the largest profit from overseas units.

Shinhan Bank CEO Jung Sang-hyuk has told divisions at headquarters to devise cooperative measures with overseas units, according to industry sources in Seoul.

FALLING OVERSEAS PROFITS

These measures came as profits declined at Korean banks’ overseas units.

The country’s four largest lenders — KB Kookmin, Hana, Shinhan and Woori —reported a combined 337.9 billion won ($244.1 million) in net profit during the first half, down 38.1% from a year earlier.

Their profits from overseas units made up only 4.8% of their total net profits in the first half, far lower than the 10.2% ratio in 2014.

To bolster overseas profits, industry sources said Korean banks need to shift their focus from their current retail banking business centered on Southeast Asia.

Write to Euijin Jeong at justjin@hankyung.com
 
Jongwoo Cheon edited this article.