Poland becomes strategic base for Korean companies, banks

SEOUL, November 20 (AJP) - Poland is emerging as a pivotal European base for South Korean manufacturers — and a fast-growing market for Korean financial institutions eager to support that investment.

As companies pour capital into sectors such as batteries and defense, banks are moving quickly to meet rising demand for local financing. In a milestone for the industry, a Polish national has been appointed to lead a South Korean bank’s overseas branch for the first time.

IBK Bank has received approval from Poland’s Financial Supervision Authority to operate a local branch, becoming the only South Korean bank granted full branch status in the country, financial industry sources said. The approval comes two and a half years after the bank opened its Wroclaw office in May 2023.

The branch is preparing for launch, and its appointment of a local financial expert as branch manager marks a departure from long-standing practice: until now, every overseas branch of a South Korean bank has been headed by a Korean national.

“We have been preparing to support local businesses financially and are setting up systems to meet diverse customer needs,” an IBK official said, adding that most local staff have already been hired.

Other banks are also accelerating their expansion. Woori Bank opened a Warsaw branch in March, followed by Hana Bank’s branch in Wroclaw in September. The Export-Import Bank of Korea established a Warsaw office in June, while KB Kookmin and Shinhan Bank currently operate Korea Desks and representative offices. Industry officials say these institutions may also move to establish full-fledged branches.

The momentum reflects Poland’s growing appeal as a financial market compared with Korea’s saturated banking environment.

As of late 2023, 370 South Korean companies were operating in Poland, with cumulative investment totaling $6 billion since the two countries established diplomatic relations in 1989. Yet only a handful of Korean financial institutions have entered the market, leaving room for significant growth.

Demand for corporate financing is set to rise as South Korean firms deepen their footprint.

LG Energy Solution is expanding its Wroclaw battery plant, while defense manufacturers are positioning for large-scale export deals under Poland’s sweeping military modernization program.

“Setting up and operating overseas branches takes time to generate returns,” a financial industry insider said. “The biggest challenge is navigating complex regulatory frameworks, which requires strong support from our financial authorities.”

* This article, published by Aju Business Daily, was translated by AI and edited by AJP.