Korean Banks Target 'Land of Opportunity' Poland ... Expanding K-Defense Exports

Securing Bases in Poland and Eastern Europe
Expanding Economic Exchanges with Korea
Increasing Defense Exports... More Financial Support

Domestic banks expanding their overseas networks are now extending their reach into Eastern Europe, including Poland. This trend is driven by the expansion of economic exchanges with South Korea, as well as the rising geopolitical importance of the region following the Russia-Ukraine war, which has also led to increased defense industry exports. Competition among domestic banks to secure an early foothold in this area is expected to intensify.

According to the financial sector on December 15, IBK Industrial Bank of Korea recently received a business license (final approval) from the Polish Financial Supervision Authority, established a business division within its Warsaw subsidiary, and held an opening ceremony. This marks the first time a domestic bank has obtained a corporate business license in Poland, rather than simply opening a branch or office. With this milestone, IBK has begun full-scale local operations. In particular, Korean small and medium-sized enterprises operating in Poland and Eastern Europe are expected to be the main targets.

In addition to IBK, Hana Bank opened a branch in Wroclaw, Poland, in September. Woori Bank also signaled the start of its local expansion by opening a branch in Warsaw in March.

Before opening its branch, Hana Bank signed a memorandum of understanding (MOU) for global business expansion with PKO Bank Polski, the largest commercial bank in Poland with the highest market share. The two banks are cooperating on a variety of global business initiatives, including mutual support for overseas branches and collaboration in corporate finance operations.

With the opening of its Poland branch, Woori Bank has secured its third European base, following its London branch, which handles foreign currency funding in Europe, and Woori Bank Europe in Frankfurt, Germany, which is dedicated to corporate finance. The bank plans to oversee operations in Eastern European countries such as Hungary, the Czech Republic, Slovakia, and Romania through its Poland branch.

KB Kookmin Bank and Shinhan Bank also maintain offices in Poland. Kookmin Bank established a Korea Desk in Warsaw last year. Kookmin Bank has long been preparing for entry into Poland, signing a business agreement with Pekao Bank in 2022. Pekao Bank is regarded as one of Poland’s top corporate finance institutions. A Kookmin Bank representative said, “We support Korean companies and local partner firms operating in Poland, including mutual client referrals and recommendations with Pekao Bank. We are also collaborating on a range of trade finance products, such as guarantees and letters of credit.”

Shinhan Bank, which has shown the most notable overseas expansion among commercial banks-including SBJ Bank (Japan) and Shinhan Vietnam Bank-is also strengthening its operations in Poland. Shinhan Bank established an office in Poland as early as 2014 to monitor market trends. A Shinhan Bank representative explained, “We have redeployed staff to the Poland office to strengthen our European network, including European Shinhan Bank, the London branch, and the Hungary office.” The bank plans to enhance its competitiveness in Eastern Europe by expanding partnerships with global financial institutions (FIs).

The focus on Poland and Eastern Europe by banks is underpinned by expanding economic exchanges between these regions and South Korea. In the capital city of Warsaw, major Korean defense companies such as Hanwha Aerospace, Hyundai Rotem, and Korea Aerospace Industries (KAI), as well as local subsidiaries of Samsung Electronics, LG Electronics, Hyundai Motor, and Kia Motors, have established a presence. Wroclaw is home to many Korean companies in the secondary battery sector, including LG Energy Solution. A bank official operating in Poland noted, “Not only large corporations but also related partner companies are important targets.”

Recently, as defense industry exports have increased, related financial support has also followed. Hana Bank, in collaboration with the Export-Import Bank of Korea, plans to provide 300 million euros (about 518.8 billion won) in K-defense export financing to Poland and other European countries. In 2023, a consortium of commercial banks was formed to support the second round of exports to Poland by domestic companies.