Nov 14, 2023
Top Korean Banks Send Staff Abroad as Won Trading Goes Longer
, Bloomberg News
(Bloomberg) -- At least two major South Korean commercial banks are expanding abroad to capitalize on opportunities as the country offers foreign investors greater access to its currency.
KB Kookmin Bank will send one FX trader each to its London and New York offices as early as next month to help when the active hours of onshore won trading are expanded to 2 a.m. Seoul time — an increase of more than 10 hours a day — in July before then going to 24 hours. Hana Bank is planning to dispatch a total of 11 employees, while also hiring some local staff, to establish a trading center in London.
The banks sense opportunity as South Korea pushes forward with reforms aimed at improving foreign investors’ access to the won — including steps to allow some offshore entities to participate in onshore trading directly, and for longer. This could potentially help Korea get upgraded in global bond or equity indexes like World Government Bond Index and the MSCI developed market index.
South Korea Plans to Extend Won Trading Hours Starting Next Year
“We’re very serious about expanding our FX business,” Changbeom Lew, the head of KB Kookmin’s trading department, said. “There’s nothing to lose.”
KB is securing credit lines and taking other steps to meet the requirements for its foreign branches — including London and Singapore — to apply for so-called “registered foreign institution” status to trade the onshore won, Lew said.
Hana’s plans focus on London, where the bank also already has an office. The 11 employees due to be dispatched there will include traders and IT workers. The bank plans to establish a full trading floor of around 20 staff to start, with local hires making up the balance, according to Moon Yeongseon, manager at Hana’s FX and derivatives trading department. It aims to build a formal dealing center with a middle and back office, he said.
Woori Bank and Shinhan Bank Co., the other two of Korea’s top four banks, currently have no plans to send traders outside the country. Woori will run night shifts in Seoul for now, according to Han Jaehoon, senior manager at Woori’s public relations department. The bank has reinforced its work force with new traders and sales personnel to operate night desks, and is planning to keep recruiting into early next year.
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