Major South Korean financial groups expanded total assets across their main Southeast Asian banking subsidiaries by 7.1% to KRW52.26 trillion ($37bn) in the first half of the year, reported semi-annual disclosures on August 19, according to Maeil Business.

Domestic credit markets in South Korea are mature and constrained by slow economic growth, forcing major lenders to aggressive expansion strategies across fast-growing emerging markets in Southeast Asia. Securing retail and corporate clients in economies like Vietnam, Indonesia and Cambodia is now vital to maintain long-term profitability.

Combined holdings for the local banking units of KB Kookmin, Shinhan, Hana and Woori Bank stood at KRW52.26 trillion on June 30, up by KRW3.47 trillion from KRW48.79 trillion at end-2025.

Shinhan Financial Group posted the strongest expansion among the group. Combined assets at Shinhan Bank Vietnam and Shinhan Bank Indonesia rose 10.8% to KRW18.72 trillion  on June 30 from KRW16.89 trillion six months earlier. The surge was driven mainly by retail expansion in Vietnam.

KB Financial Group grew its presence via regional operations in Cambodia and Indonesia. Total assets at KB Prasac Bank in Cambodia and KB Bank in Indonesia grew 7.3% to KRW16.61 trillion in the first half of 2026, up from KRW15.48 trillion. KB Prasac Bank grew to KRW8.87 trillion from KRW8.12 trillion, while KB Bank increased to KRW7.73 trillion from KRW7.36 trillion.

Hana Financial Group's Indonesian entity, PT Bank KEB Hana, reported a 9.8% asset growth. Total balance sheet holdings climbed to KRW5.18trillion from KRW4.57 trillion over the six-month period.

Woori Financial Group recorded divergent performance across its subsidiaries. Combined regional assets edged up 0.6% to KRW11.92 trillion from KRW11.85 trillion, marking the lowest growth among the four groups. Woori Sodara Bank in Indonesia saw assets fall to KRW4.42 trillion from KRW5.26 trillion. Conversely, Woori Bank Vietnam jumped 18.9% to KRW5.55 trillion from KRW4.67 trillion. Cambodia Woori Bank rose slightly to KRW1.95 trillion from KRW1.92 trillion.

Asset growth was strongest in Vietnam and Cambodia. Woori Bank Vietnam added nearly KRW900bn in six months, while KB Prasac Bank gained over KRW750bn. South Korean groups are increasingly relying on fully localised corporate and retail banking operations rather than foreign branch networks to drive revenue growth.

"Southeast Asia is seen as a key medium-to-long-term growth market as economic expansion and financial demand rise together," said a financial sector official. "Sustaining a stable profit base through localised retail and corporate banking is now more important than simply opening overseas branches."