South Korea’s Woori Bank to form Vietnam unit by July

South Korea’s Woori Bank expects to establish a Vietnam unit this month or in July, a bank official said on Tuesday, as part of the lender’s plans to expand its network in the expanding market of Southeast Asia.

Woori Bank, South Korea’s largest bank in terms of consolidated assets as of the end of March, is awaiting approval from relevant authorities to established a wholly-owned unit in Vietnam, the official said.

A Vietnamese banking source said the State Bank of Vietnam, the country’s central bank, was expected to grant a licence for the South Korean lender shortly.

South Korea is now the biggest foreign investor in Vietnam, with large investments placed to turn it into a Southeast Asian production hub by Samsung Electronics Co Ltd and LG Electronics Inc.

Other major Korean companies in Vietnam include Kumho Construction, Posco group, Hanjin Logistics and Kumho Tire.

A free trade agreement between South Korea and Vietnam that came into effect last December gives more incentives for Korean firms to invest.

Woori Bank’s Vietnam unit, once licensed, would most likely be a vehicle to expand South Korean investment in a country where it has been limited to operating two branches. Other competitors include HSBC, ANZ, Standard Chartered Bank as well as Shinhan Bank.

With the expected approval, Woori Bank would seek to strengthen its localised service to Vietnamese retail customers through channels including its mobile banking platform Wibee Bank and chat app Wibee Talk.