Four Major Financial Holding Companies Facing Overseas Roadblocks... Emergency Measures for Business Promotion

Chairmen's Business Trips Blocked Due to COVID-19
Large-Scale Investment Attraction and More All Canceled
Global Sector Also Strengthens Non-Face-to-Face Measures

On the 18th, when the aviation industry was hit hard by the novel coronavirus disease (COVID-19), citizens visiting the observation deck at Incheon International Airport were looking at the aircraft grounded at the airport amid widespread layoffs. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Kim Min-young] As international travel has been restricted due to the novel coronavirus infection (COVID-19), the global operations of the four major financial holding companies have also faced a crisis. CEOs have been unable to travel overseas to meet institutional investors in person, resulting not only in a failure to achieve large-scale investment attraction but also in difficulties in the operations of overseas subsidiaries and branches. Financial companies are focusing on strengthening non-face-to-face (untact) strategies and localization in their global divisions, but setbacks to the internal goals set at the beginning of the year have become inevitable.

According to the financial sector on the 13th, none of the chairpersons or bank presidents of the four major financial holding companies?Shinhan, KB, Hana, and Woori?have traveled abroad this year. The holding company chairpersons usually travel overseas annually to the Americas, Europe, Southeast Asia, etc., to hold investor relations (IR) presentations or to inspect overseas subsidiaries and branches of their affiliates. Typically, overseas IR is an effective means to attract foreign investors. This year, the chairpersons and bank presidents had planned several overseas IR events. However, all plans made at the beginning of the year were canceled due to COVID-19, and the global strategies have also been scaled down and adjusted accordingly.

Difficulty in Attracting Overseas Investors

In particular, it is known that few financial companies have achieved investment results in the IR sector. One reason is that investors hesitate because the future development of COVID-19 is uncertain. Each holding company's IR department is meeting investors through conference calls and video meetings, but these interactions remain indirect.

An official from a financial company lamented, “High-profile overseas institutions tend not to show much interest unless CEOs come in person.”

As there are no signs of improvement in COVID-19, financial companies are substituting with untact strategies even in their global operations. Although online meetings and conference calls have been used due to physical distance constraints, now almost all work processes and meetings are conducted online.

Strengthening Non-Face-to-Face Management in Global Division

Shinhan Bank held its global management strategy meetings, which were previously conducted at the Yongin Giheung Training Center, via video conference this year. The meetings were held on February 5 and 6, during the height of COVID-19, and another online meeting was held on the 20th of last month in the second half of the year. In May, the bank newly established the ‘Concord Meeting,’ which is held once a month. This video conference aims for in-depth discussion and communication regarding the business status of global branches and key local issues. One or two overseas branches are selected for focused discussions led by the head office department heads. It is evaluated as more efficient in terms of cost and time savings compared to traveling by plane to visit the site in person. A Shinhan Bank official explained, “Concord means ‘harmony’ in the dictionary sense, and it is part of efforts to continuously create the synergy of ‘One Shinhan’ by fostering mutual understanding between the head office and overseas branches despite difficult circumstances.”

KB Kookmin Bank is focusing on a Southeast Asia strategy. In April, it received preliminary approval to establish a local subsidiary in Myanmar and subsequently obtained the final approval. It has also resolved to acquire additional shares in Indonesia’s Bank Bukopin. KB Kookmin Bank has dispatched staff to Southeast Asia, including Myanmar, Cambodia, and Indonesia, to complete the Southeast Asian financial belt. This decision reflects the judgment that they cannot miss the new growth opportunities in Southeast Asia despite the COVID-19 situation.

A Hana Bank official also stated, “We are conducting untact meetings through video conferencing systems with employees overseas and selectively dispatching employees on business trips only when absolutely necessary.”

Woori Bank is focusing on untact management of overseas branches. In particular, through an organizational restructuring in the second half of the year, it established a Global Corporate Finance (IB) Review Department. This is an effort to build capabilities in preparation for ‘global deals’ starting from the head office.