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BRANCH BANKING | Tony Chua, Korea

Korean banks having difficulty in localising overseas branches

Seven lenders only had average score as they shifted their priority to stabilising operations at home.

Korean banks have made little headway tailoring their overseas operations to local markets, in part because they have shifted their focus from bolstering branches abroad to stabilizing their businesses at home, according to the Financial Supervisory Service (FSS).

The FSS said on Monday that 83 overseas branches of seven banks - Shinhan, Kookmin, Woori, Hana, Korea Exchange Bank, Korea Development Bank and Industrial Bank of Korea - maintained an average score of three in an evaluation designed to assess how well they localize their operations abroad.

The evaluation, which uses a five-point scale, incorporates everything from the number of employees hired from the communities to the portion of savings accounts opened by locals. The FSS introduced the evaluation in October 2008 to help banks track and improve their localization efforts.

The organization said that locals accounted for just 63.2 percent of the banks’ customer base in overseas markets as of the end of June, a decline from 64.3 percent at the end of last year. Local employees accounted for 77.2 percent of the banks’ overseas workforce, which is down from 78.1 percent at the end of last year.

View the full story in JoongAng Daily.

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