Financial Firms Also 'De-China'? Overseas Assets Increased 3.6 Times in 10 Years, Especially in the US and Southeast Asia Up

The Impact of 'Hanhanryeong' Seems Significant... Decline in Japanese Investment Amid Low Growth Slump
Expansion Strategy of Branches Following New Southern Policy Also Has Considerable Influence

Woori Bank China Branch. (Photo by Woori Bank)

[Asia Economy Reporter Moon Chaeseok] Domestic financial companies' overseas assets have nearly quadrupled over the past decade. The share of China has decreased, while the shares of the United States and Southeast Asia have increased, drawing attention.

On the 19th, CEO Score, a corporate data research institute, surveyed 39 financial companies with overseas subsidiaries based on semi-annual reports submitted as of June. The total assets of 268 overseas subsidiaries of these companies in the first half of the year amounted to KRW 159.3709 trillion. This is 3.6 times higher compared to the first half of 2012, ten years ago (KRW 34.2752 trillion).

During the same period, the total assets of these financial companies increased from KRW 1,910.8446 trillion to KRW 4,060.2737 trillion, a 2.1-fold increase. This is the result of expanded overseas investment. Securities companies increased by KRW 40.3539 trillion (1800%) during the same period, while non-life insurance and life insurance companies increased by KRW 2.2474 trillion (337%) and KRW 2.2372 trillion (338%), respectively. Notably, all four major commercial banks increased their overseas asset size by more than KRW 10 trillion each.

The company with the largest increase in overseas assets among those surveyed was Mirae Asset Securities, which grew from KRW 1.3688 trillion to KRW 29.6715 trillion over ten years, a 20.7-fold increase. However, this figure is based on last year's settlement as Mirae Asset Securities did not disclose the financial status of its subsidiaries for the first half of the year. Among the four major commercial banks, Shinhan Bank (KRW 22.8154 trillion, 180%↑), Woori Bank (KRW 18.6327 trillion, 349%↑), Kookmin Bank (KRW 17.6197 trillion, 1,679%↑), and Hana Bank (KRW 12.4693 trillion, 126%↑) had the largest investment assets in that order.

What is noteworthy is that the share of China has decreased while the shares of the United States and Southeast Asia have increased. China, which accounted for 45.4% of all overseas regions in the first half of 2012, dropped by 18.1 percentage points (p) to 27.3% in the first half of this year. This was the largest decline. It is analyzed that the overall de-China trend in the domestic industry continued due to internal and external risks such as the 'Hanhanryeong' (Korean Wave restriction order). During the same period, Japan's share also decreased from 20.8% to 8.1%, a 12.7%p drop, which is largely attributed to Japan's continued low growth.

On the other hand, the share of investment in the United States showed the highest growth, rising from 9.3% to 20.3%, an increase of 11%p over the past ten years. As domestic companies actively entered the U.S. market, investments by banks and others also surged. Investments targeting major Southeast Asian countries also increased significantly under the 'New Southern Policy.' Indonesia's share expanded from 5.2% to 13%, a 7.8%p increase. Vietnam's share rose from 4.0% to 11.2%, a 7.2%p increase. Cambodia's share grew from 0.4% in the first half of 2012 to 7.3% this year.

This content was produced with the assistance of AI translation services.