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Commercial lenders are opening greater numbers of wealth management (WM) branches while shuttering branches in non-affluent areas to cut operating costs, market watchers said Tuesday.

These branches cater to high net-worth customers with assets of over 300 million won ($220,945).

The strengthened services come as baby boomers here, born between 1955 and 1963, are retiring with assets they have accumulated during Korea's industrialization. This means growing demands for banks handling tax and administrative services concerning inheritance, gift and family business succession.

Also at play is tightened government regulation put in place to curb household debt, which represents a loss of stable interest income for lenders.

According to market sources, the number of wealth management branches operated by Korea's top four banks — KB Kookmin, Shinhan, Hana and Woori — came to 87 as of April, up 16 percent from 75 in 2018.

KB Kookmin saw the highest increase, adding 12 over the past five years. It operated 33 as of April, up from 21 in 2018. Woori's figure rose to six from two.

Financial Supervisory Service data showed the number of ordinary branches operated by the four stood at 2,826 as of last year, down from 20.1 percent from 3,563 in 2018.

The lenders plan to fortify premium private banking centers to include customers with assets surpassing 3 billion won.

Woori plans to increase the number of private banking centers for customers whose assets exceed 1 billion won to 20 from the current three by 2026.

"The competitiveness of banks will be measured by their strength in wealth management," a banking industry official said.