(Yonhap News)
More and more Korean banks are withdrawing from their hot competition to increase their number of branches nationwide.
While the number of branches had been a barometer for a commercial bank’s market dominance and competitiveness, they have been increasingly skeptical over tapping as many regional markets as possible.
KB Kookmin Bank reduced the number of its branches to 1,165 at the end of 2011 from 1,174 a year earlier.
The nation’s largest bank has been pushing for business efficiency by integrating branches in several areas.
Standard Chartered Bank Korea, which carried out manpower restructuring last year, saw the number of branches fall from 408 to 338 over the corresponding period.
Other commercial banks are expected to follow suit over the next few years, according to officials at the Financial Supervisory Service.
Though the combined number of bank branches inched up last year on a year-on-year basis, the pace growth has slowed.
A lender had opened more than 20 branches per annum on average. But the average growth dropped to about five or six recently, according to FSS data.
The number of branches of Hana Bank and Koreas Exchange Bank edged up three and two to 653 and 356, respectively.
The two affiliated lenders could enter a full-scale branch integration mode in the coming years. Hana Financial Group acquired KEB in February.
Citibank Korea, which added only three more branches in 2011, is mapping out measures to enhance profitability per branch and per banker.
Amid their focusing on profitability rather than the business scale, the number of combined bank branches in Seoul fell by eight to 2,516 last year.
As a substitute, more and more banks including Shinhan Bank stress the significance of elaborating on the “smart phone-oriented banking” service or “smart-banking” with high-end technologies.
In a similar vein, Citibank has been striving to attract younger customers through 22 branches across the country with more automated services with fewer employees.
In contrast to the trend under which banks are closing down uncompetitive branches at home, they are set to expand business networks in Asia’s emerging markets.
In particular, their 2012 targets include countries in central and Southern Asia as well as those in Southeast Asia, China and Japan.
“Aside from markets like China, Vietnam and Singapore, the banking industry began actively tapping Kazakhstan, India and Bangladesh,” a local banker said.
Kookmin Bank is considering opening branches in China and Osaka this year.
In addition, the bank is moving to open a liaison office in Mumbai, India under its strategy to diversify operating networks.
Woori Bank also plans to speed up opening more branches in China. Among Woori’s overseas targets for this year are Chennai, India and Dacca, Bangladesh.
By Kim Yon-se (
kys@heraldcorp.com)
