[Global Finance Award] NH Capital leads NongHyup’s foray into global markets

FINANCIER OF THE YEAR/ NH CAPITAL


Under the leadership of CEO Lee Koo-chan, NH Capital, a subsidiary of South Korea’s leading banking group NH NongHyup Financial Group, is making a foray into the fast-growing financing markets in Asia, as part of its efforts to diversify its business portfolio and raise its profile as a global financial firm.

With the corporate vision of becoming a global credit-specialized financial company, NH Capital plans to sign partnership agreements with agricultural cooperatives in Southeast Asian countries and India, offering tailor-made financial business models suitable for each market, according to the CEO.

“We are striving to become a global financing company by expanding overseas networks in the Southeast Asian market, which has been marking fast growth in recent years,” Lee said.

“We expect to secure a solid business foundation in the early stages by making overseas entries by forging partnerships with counterparts (in each country).”

The company has been stepping up its entry into other regions, backed by the South Korean government’s New Southern Policy aimed at cultivating relations with ASEAN and India as key partners in diplomacy, business and culture, and boosted by NH Capital’s own mid- and long-term global strategy,

By 2022, it plans to establish global networks in five countries -- China, Indonesia, India, Vietnam and Myanmar -- to become Asia’s leading capital company.

Since its establishment in 2007, NH Capital has offered comprehensive financial services including personal loan, corporate finance, equipment finance, auto finance, real estate finance and venture capital.

NH Capital logged one of the best profits among the nonbanking affiliates, contributing to the group’s balanced portfolio.

The company posted net profit of 40.2 billion won ($34 million) in the third quarter this year, similar to 41.6 billion won logged last year. But its financial soundness has improved, with the delinquency rate declining to 2 percent as of the third quarter from 2.43 percent in the same period last year.

In addition to his leadership in achieving qualitative growth of the company, the CEO has been recognized for enhancing the company’s digital financial functions and expansion in the global market.

NH Capital is the second-largest shareholder of China Co-op Group International Leasing, a financial leasing firm in China.

Under a 2016 deal, NH Capital bought a 29.82 percent stake worth 14.5 billion won in the Chinese financial leasing firm. Under the deal, the Seoul-based company has been participating in the management of the Chinese firm, with the right to appoint a director to the board and a put option as a strategic investor.

With the deal, NH has been strengthening the partnership with its Chinese counterpart, and the two have been pushing for joint ventures in financial services including securities and insurance in China.

The leasing firm’s parent China Co-op Group and NongHyup share similarities both in structure and the range of business, as they are both Asia’s leading cooperative financial institutions.

The former, entirely invested by the state-owned All China Federation of Supply and Marketing Co-operatives, is the largest agricultural cooperative and a key platform for distribution of agricultural products in rural areas, generating 25 trillion won in sales annually.

China Co-op Group’s leasing and loan affiliate has been generating stable income, enough to provide annual dividends. A year after making the investment, NH Capital received 700 million won of dividends from the Chinese firm for profit generated in the 2018-2019 financial year.

Taking its investments in China as a stepping-stone, NH Capital has been seeking additional investment opportunities in Southeast Asia, the company said.

In particular, the company is currently in discussion with HTOO Group in Myanmar to forge partnerships in the nonbanking financial sector, such as lease financing, credit cards and loans. The proposal for business partnership was made by NH Financial Group Chairman Kim Gwang-soo during his visit to the Southeast Asian country, the company said.

It expects to clinch deals in Myanmar and India soon while making efforts to secure additional investment opportunities in Vietnam and Indonesia.


By Cho Chung-un (christory@heraldcorp.com)