DGB Daegu Bank gets green light to go commercial

The regional bank is the first in 32 years to be granted approval, bringing the number of commercial banks in Korea to seven.

DGB Daegu Bank's headquarters building in Suseong District in Daegu on Thursday [NEWS1]

DGB Daegu Bank, previously a regional bank, became the first newly approved commercial bank in 32 years in Korea on Thursday.

The regional bank was granted approval to transition by the Financial Services Commission (FSC), making it the seventh commercial bank in the country along with KB Kookmin, Shinhan, Hana, Woori, Citibank Korea and Standard Chartered Bank Korea.

“Daegu Bank’s transition to a commercial bank is expected to encourage competition among banks in new regions it will be entering, potentially leading to a bigger benefit for consumers,” said the FSC in a release.

Daegu Bank, based in the southeastern city, plans to establish 14 new branches in the greater Seoul area and the Chungcheong and Gangwon regions over the next three years.

DGB Financial Group, the parent company of DGB Daegu Bank, filed an application for the transition to the financial authorities in February.

In July of last year, the government announced its plan to drive competition among banks by licensing new players, and later outlined details for the transition approval procedure in January.

Founded in 1967, DGB Daegu Bank was the first regional bank in Korea, and is now also the first to transition into a commercial bank.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]