Korean bank seeks local financial partner for expanding retail market

The Korea Exchange Bank is in the market for a local commercial bank that will partner with the foreign bank in expanding its banking activities in the Philippine corporate and retail market.

"Part of our expansion plans is to reach the retail banking market, and we are looking to partner with a local commercial bank," said Dong-Jin Kim, Korea Exchange Bank deputy president and head of global corporate bank over the weekend.

The other part of its expansion plan, is review its options in branch expansion. Foreign banks are allowed to open only six branches as the Philippine market is said to be "over-banked" and to avoid conflict with local banks.

Korea Exchange Bank presently operates a single branch but sees some flexibility and economies of scale in partnering with a well-placed commercial bank with retail banking capabilities.

"We are still in the process of discussing our expansion plans in the Philippines," the deputy president said.

Meanwhile, bank officials revealed that it has set aside $140 million for this year’s loan portfolio or 20 percent heftier than last year. Majority of the funds would likely be allocated to Korean companies doing business in the Philippines.

The bank deputy president said that a Korean energy firm is reportedly involved in a power-generation project in the Philippines, and it expects to be part of that activity.

In fact, Dong-Jin categorically expressed support for the 10-point development program of the Arroyo administration especially growth of the small and medium enterprises which can work with Korean firms.

He said that the bank would like to initially act as a conduit for business between the two nations, and later to be involving in various banking activities as the transactions blossom. "And that includes remittances and fund transfers not only between Korean and Philippine businesses, but also Filipino workers in Korea," he added.

However, one area the Korean bank executive gave particular notice is the establishment of call centers. Citing cheap but skilled labor as well as good grasp of the English language makes the Philippines a good site for global call centers.

He admitted that there are Korean companies expressly interested in putting regional centers and Korean Exchange Bank would like to be in the middle of the venture.