Bank will be a bridgehead for its operation and for other affiliates in S.E. Asia; NH Financial to form j.v. with Kongso Group, angling to cut its operation base in China’s financial market
President Lee Dae-houn, 2nd left, of NH Bank, meets with Director Allen Awoo in charge of the Banking Sector of the Hong Kong Financial Authority. (Photo: NH Bank)
NH Financial Group has been hard at work to take advantage of developing the local subsidiary of NH Investment and Securities Co. in Hong Kong as an advance base for the financial group’s global operations, exploring financial opportunities and strengthening asset management capacity.
In the next two years, NH Bank will open its branch in Hong Kong so that synergy among the group’s affiliates might be boosted to the extent that Hong Kong would be the launching base for the group’s operations in Southeast Asia and Southwest Asia under the Asia Financial Belt that the group has been building. Chairman Kim Gwang-soo plans to visit China and Hong Kong to streamline the group’s operations.
The financial group is ready to push the expansion of the corporate investment banking operations thru the NHIS Hong Kong operation, which was set up before the company became an affiliate of NH Financial Group in 1994. Its local subsidiary posted 43 million won in net profit in 2015, 7.1 billion won in 2016 and it’s zooming to 14.5 billion won in 2018. In the 2nd half of last year, the group boosted the capital of the Hong Kong subsidiary by $125 million to bring total increased capital to $350 million.
The group set up the NH Financial Hong Kong Financial Center to help create synergy among the group’s affiliates as the experts from both NH Bank and NH Savings Bank will be dispatched to the center to develop joint financial commodities and explore the investment areas at the same time.
Officials of NHIS said they already came up with over 100 investment target cases connecting the affiliates.
NH Bank, a major affiliate of the group, has been working on a plan to set up its branch in Hong Kong in two years in 2020. President Lee Dae-hoon called on the Hong Kong financial authorities to ask for the license to set up the branch in Hong Kong for the bank early this year, He also had a meeting with Chairman Steven Phillips of the Hong Kong Investment Office to unveil the bank’s operational plan thru its Hong Kong branch, which is ready to open for business in 2021 after getting the license in 2020.
In China, the group is working on setting up a joint venture with Kongso Group, the largest farm produce distributer in China, and under the Chinese Government, 100 percent is owned by the Kongso Joint Co., the largest cooperative organization in China. The group signed an agreement with Kongso Group on comprehensive cooperation on financial operation in January 2016.
The exchange between the two signatories continued even during the period, when the Chinese government put pressure on Korea due to the THAAD self-defense installment in Korea. They renewed the agreement in 2017 to step up the exchanges each other.
In 2017, NH Capital took over a 29.82 percent stake in a lease and loan company under Kongso Group and became the number two stakeholder in the company.
The company got a dividend in the first year following the stake investment, continuing its right to share the management. The group will seek ways to set up the j.v. firm in other areas such as securities and insurance, expecting they will be able to earn very good profits based on the foundation made by Konso Group in the Chinese financial market.
A financial source said it would be very difficult for a Korean financial firm to operate in the Chinese financial market on its own without the help from a Chinese partner, due to the way the market is made up in China. NH Financial has been striving to carve out its own form of the financial operation in China thru the joint-ventures with the Chinese financial group.
The group is expected to set up a task force so that visible results can be made toward joint ventures with Kongso Group this year, an official of the group said.