Woori Bank CEO Cho Byung-kyu / Courtesy of Woori Financial Group

A growing number of Korean financial market players are showing signs of extended profit in Vietnam, a feat achieved after years of a downturn brought on by the COVID-19 pandemic, market watchers said Wednesday. Included are Woori Bank, Hanwha Life and Lotte Card.

Underpinning the collective success was target-specific localization and strong communications efforts with employees in the Southeast Asian country, a basis for a deeper understanding of corporate and retail customers' needs.

Woori Bank said July 21 that Woori Bank Vietnam, its corporate entity in the Southeast Asian country, provided $4.69 million (6.5 billion won) in dividends last year. It was a first since the entity's establishment in 2017.

The amount constitutes 10 percent of Woori Bank Vietnam's net income in 2023. Woori opened its Hanoi branch in 1997 and has since expanded its network of businesses throughout 26 locations nationwide.

"The significance should be placed more on the fact that the dividends were generated at all, not the amount," a Woori Bank official said.

"More to the credit is our strategy to fortify retail business without the help of mergers and acquisitions with local market players. It was a testament to our continued efforts since the opening of the Hanoi branch."

Woori Bank Vietnam accounted for one-sixth, or 16.4 percent, of Woori Bank's overseas operation net income.

This is a significant portion of Woori's total overseas business portfolio, since the bank aims to draw 25 percent of its net income from overseas businesses by 2030.

The Vietnamese entity registered an all-time high net income of $48.96 million in 2022. The figure has since ticked down slightly to $45.70 million in 2023, but had steady strong growth from $2.16 million in 2017.

It signed an agreement with two leading local payment and settlement platforms, VNPAY and ZaloPay, in the first half of this year.

The entity is a party to a three-way business partnership whereby QR-based services for Vietnam-Thailand transactions will be available. Among them is the National Payment Corporation of Vietnam, Vietnam's state-owned payment intermediary.

Lotte Finance Vietnam, the Vietnamese entity of Lotte Card, registered a profit of 500 million won last month.

Last month's profit broke six years of consecutive losses, since 2018, when the Korean card issuer acquired Techcom Finance, a Vietnamese consumer finance service provider, to establish the Vietnamese entity.

Hanwha Life CEO Kim Dong-won / Courtesy of Hanwha Life

The success was driven by the development of a comprehensive credit rating system, followed by the introduction of diverse borrowing rates tailored to creditworthiness. Also at play was a variety of loan products including unsecured loans, auto loans and payment services.

This in turn led to Lotte's Vietnamese entity having its low-credit borrowers outnumbered by their high-credit peers.

Hanwha Life's Vietnamese subsidiary paid dividends of about 5.4 billion won early this year, a first for any overseas entities of Korea's life- and non-life insurers combined.

The Vietnamese entity was established in 2008 and remained unprofitable for the next decade. However, it turned a profit in 2019, and has since generated strong earnings. Its net income from 2019 to 2023 totaled 117.8 billion won.

All employees of the entity are from Vietnam, except three including the firm's head. It aims to make the list of the top five insurers in the Southeast Asian country by 2030.