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KEB - RUSSIA KEB To Start Services In Moscow
Korea Exchange Bank (KEB) said Monday that it is looking to Russia to help earn 40 percent of its total revenue from overseas operations by 2025.
The bank's overseas operations accounted for 15.7 percent of its total pretax income in the first three months of this year.
"As a growing number of Korean companies enter Russia and the neighboring Commonwealth of Independent States (CIS), their demand for diverse financial services is also on the rise," Lee Dong-man, head of KEB's International Marketing Support Team, said by telephone.
KEB plans to set up a wholly-owned subsidiary in Moscow by August to absorb the emerging demand for local financial services from Korean and local companies in Russia and 11 CIS countries that include the Ukraine, Azerbaijan and Kazakhstan, Lee said.
On top of Korean businesses, KEB is also targeting local corporate and individual customers to its retail banking products, the bank said in a statement.
"We will conduct a thorough survey of the Russian financial markets and the demands of local customers not only to establish a presence there but also to boost our revenue," the statement said.
KEB has received final approval from the Central Bank of Russia to establish the Russian subsidiary which will be operational from August, Lee said.
The bank sees huge growth potential in Russia because Korean companies such as Samsung, LG and Hyundai Motor run production facilities and plan additional investments there.
"Their bigger presence in Russia means a bigger need for financial services," Lee said.
Russia has a population of 140 million, plentiful natural gas and other resources, and a young and productive workforce, said the statement.
The bank has 91 overseas sales networks in 23 countries. It operates nine subsidiaries in six countries ― three in the U.S., two in China, and one each in Canada, Brazil, Germany and Indonesia, the statement said.
To help achieve the 2025 goal, the bank is planning to open three new outlets in India, Mexico City and Canada this year. The addition would bring the total number of outlets to 94 at the end of this year, it said.
In the first quarter ended March 31, KEB posted 71.7 billion won ($70.5 million) in net profit, down 4.8 percent from 75.3 billion won a year earlier. Operating profits fell 25 percent to 85.8 billion won from 114.2 billion won during the same period, according to a regulatory filing.