[THE INVESTOR] Spanish lender Banco Santander will shut its Korean operations after seven years, joining foreign banks’ exodus from Korean market in a bid to slash costs through global restructuring, a source said on June 21.
The eurozone’s largest bank by market value will close its office in Seoul before the end of the year and some of its employees will be dispatched to Hong Kong.
Launched in 2009, the Seoul office has been serving as a liaison between Korean corporates and official institutions and Grupo Santander’s global network. It will also provide support to Santander clients doing business in Korea.
“Banco Santander decided to pull out as the bank has low probability of full-fledged Korean market entrance and because foreign banks’ are only allowed to work in limited business areas,” an official at a foreign lender said.
The move comes as other foreign financial firms, including Goldman Sachs, Barclays and Royal Bank of Scotland, closed their offices here or reducing operations as the country’s financial industry is losing steam.
In a bid to bolster profitability and address the rapid shift towards internet and digital banking, Banco Santander also plans to close 450 branches in its Spanish home market.
The bank’s decision to withdraw from Korea may give a second thoughts to other foreign firms operating here. Currently, a total of 18 foreign lenders have their liaison offices in the country for market research and network purposes.
By Park Han-na (
hnpark@heraldcorp.com)