The strategic alliance of two lenders enables parties to cross-sell products, step up global co-operation and sharing of information among the two lenders' subsidiaries.
South Korea's Woori Finance Holdings Co. said it has agreed to a strategic alliance with China's Bank of Communications Co., marking the latest effort by a South Korean lender to boost its presence in China.
Woori, South Korea's largest lender by assets, said in a statement Wednesday that the two sides have agreed to a broad strategic alliance, including cross-selling of products, global co-operation and sharing of information among the two lenders' subsidiaries.
"This agreement will allow Woori to strengthen its operations in China, while Bank of Communications will be able to boost its business in Korea as well," a Woori official told Dow Jones Newswires.
Shanghai-headquartered Bank of Communications is China's fifth-largest bank by assets, and it has one branch in Seoul with total assets of 1.93 trillion Korean won ($1.8 billion) at the end of March. Woori Finance's Chinese banking unit has 13 branches in mainland China with combined assets of $2.03 billion by the end of March.
The agreement comes amid efforts by South Korea's largest lenders—Woori, KB Financial Group Inc., Shinhan Financial Group Co. and Hana Financial Group Inc.—to find new sources of growth as domestic competition intensifies. However, their efforts to strengthen their operations in emerging Asian economies, including China and Indonesia, so far haven't yielded tangible contributions to their bottom line.
The agreement between Bank of Communications and Woori, which doesn't include a share swap, is the latest strategic alliance between a Chinese and a Korean bank. Industrial & Commercial Bank of China Ltd. and KB Financial have been in talks to set up an investment-banking joint venture, while Hana Financial and China Merchants Bank Co. signed an agreement on business collaboration earlier this year.
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