이 기사는 2021년 06월 17일 07:50 thebell 에 표출된 기사입니다.

South Korea’s Kwangju Bank, a banking affiliate of JB Financial Group, will exit from China less than four years after it opened a representative office in 2017.

Kwangju Bank has decided to close its representative office in Wuxi, Jiangsu Province, industry sources said Tuesday. The bank’s board of directors will approve the plan next month.

The bank is expected to start its exit process soon. “We opened the office to study the Chinese market as it is the second largest market after America,” said an official at Kwangju Bank. “We decided to close the office, but haven’t officially shut it down yet.”

The lender aimed to use its presence there as a springboard for market research and to build ties with Chinese banks.

“Kwangju Bank has been looking for opportunities to enter the Chinese market for years, but couldn’t find enough business opportunities there,” said an industry source. “The bank thought it would be difficult to grow a business to the extent it would generate profits as it can’t generate profits immediately after establishing its branch and investing in it.”

It is a rare case that a financial institution withdraws its operations in the overseas market.

“A representative office is not for direct sales, unlike a branch, but the exit means that the bank has given up on making a foray into the country,” said a banking industry source. “It must have been difficult for the lender to secure a market share as China is the market where many commercial banks and local banks compete with each other.”

Kwangju Bank is expected to focus on other countries such as Vietnam. Last year, JB Financial acquired a 100% stake in Morgan Stanley Gateway Securities - a midsized brokerage headquartered in Hanoi - and renamed it to JB Securities Vietnam. (Reporting by Jang-joon Lee)