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| Hana Financial Group Chairman Kim Jung-tai |
Hana Financial Group will team up with China Investment Corporation (CIC) to set up a 1 trillion won ($847 million) fund to invest in Korean companies operating in China, the group said Wednesday.
CIC operates about $941.4 billion in funds, one of the world's largest sovereign wealth funds with business partners including Goldman Sachs, HSBC, Deutsche Bank and Nomura.
"We are in talks to finalize details on when the fund should be launched and how much it should be," a Hana official said.
The fund will be used to help Korean firms seeking business opportunities, or expansion of their current presence in China.
Part of it could be used for Chinese companies seeking to enter Korea.
"Apart from boosting profits from global investment, the joint project carries more meaning as the two sides will be able to strengthen business relationships," a Hana official said.
The project boasts mutual benefits as Korean firms are able to find easier ways to enter the Chinese market with its huge customer base and growth potential, and the Chinese sovereign fund can turn a profit by helping new firms.
The joint effort came after the group chairman Kim Jung-tai and Ji Sung-kyoo, CEO of the group's most lucrative subsidiary KEB Hana Bank took a week-long trip to Kunming, China in June.
The two met with officials from the CIC to build a business relationship.
The project to boost overseas profits is part of group-wide efforts to identify new sources of growth amid deteriorating domestic profit relying heavily on the net interest margin (NIM).
China in particular has been the key area of focus for growth, with KEB Hana branches established in Jilin, Liaoning and Heilongjiang.
"The latest move is expected to help us boost our presence abroad as CIC has a substantial influence in the global financial market," the official said.
