Korea Exchange Bank (KEB) has opened a global trade finance and remittance centre in Hong Kong, aiming to improve service for Korean exporters based in the city-state.

The bank chose its new location based on Hong Kong’s position as one of Asia’s financial hubs, as well as its proximity to Korea, with only one hour’s time difference.

Namgyong Joh, senior manager at KEB, tells GTR that the decision to open the Hong Kong centre was not necessarily made to increase trade collaboration between Korea and Hong Kong, but to improve trade finance services for KEB customers.

“The new Hong Kong trade finance centre will provide the efficient, timely financial services necessary to grow Korea’s international trade, through centralised processing of trade finance transactions such as forfaiting, and opening, advising, and accepting letters of credit. In addition, the centre will enable KEB to achieve greater economies of scale, contributing to improved bank profitability,” says KEB.

The opening of KEB’s Hong Kong centre marks the beginning of a strategic partnership with Wells Fargo, after the two banks signed a memorandum of understanding in 2011. “Since Wells Fargo does not provide corporate banking in Korea, KEB provides said service to Wells Fargo’s corporate customers investing in Korea. In selecting the alliance bank we considered Wells Fargo’s expertise in payment and trade business, pricing and reciprocity,” says Joh.

Wells Fargo will be responsible for certain areas of the Hong Kong operation designated by KEB.