Low economic growth, an extremely competitive banking market and record low interest rates are keeping South Korean lenders busy. And smaller, regional banks that service small and medium-sized enterprises (SMEs) and retail clients in their own catchment areas are generally suffering more than the larger, Seoul-based banks.
But Busan-based BNK Financial Group and Daegu-based DGB Financial Group are two examples of regional banks that are doing particularly well. The banks’ strong involvement in the real economy, a broadening of scope through mergers and acquisitions (M&A), and expansion abroad are helping them navigate a tricky domestic environment. If regulatory discrepancies obstructing growth in non-interest income are resolved, these banks could grow further, according to some analysts.
