SOUTH KOREA

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With a population of 51 million and a forecasted GDP of $1.790bn in 2025, South Korea is a dynamic open economy, distinguished by its high per‑capita income, advanced industrial diversification and substantial positive net international investment position. As of 2023 it maintained net foreign assets balanced by robust sovereign and private savings, though its NIIP has moderated after years of strong current‑account surpluses.

A key lingering weakness is the rising public debt ratio, which climbed from roughly 35.9 % of GDP in 2018 to about 50.4 % in 2023 — and is projected to reach around 51.4 % in 2024 and 53.6 % by 2028, aligning with median “AA”‑rated peers but eroding its previous credit‑strength status. While debt is not viewed as a structural credit weakness, controlling further increases remains a priority.

Historically prudent fiscal management underpinned South Korea’s creditworthiness, but the pandemic‑era stimulus and policy proposals such as universal cash transfers have challenged consolidation efforts. The government continues to emphasise fiscal sustainability, though political cycles may slow the pace of adjustment.

Other medium‑term challenges include an ageing population, productivity pressures in the non‑ICT sectors and global competitiveness risks. Economic growth is expected to remain in the moderate 2–3 % range through 2025, supported by steady exports and resilient domestic demand.

Summary

BNP Paribas has been present in South Korea since 1976 and is a leading bank in the country. It is one of the few international banks catering for customers' domestic and international cash management and trade finance requirements, both foreign companies doing business in Korea and Korean entities seeking to expand their international focus.

Currency

  • South Korean Won (KRW).

Bank accounts

  • A company, which is incorporated in South Korea, is considered resident while its overseas branch is categorised as non-resident. A company, which is incorporated out of South Korea, is considered as non-resident, while its domestic branch in South Korea is considered resident.

BNP Paribas Cash Management Capabilities

Cash collections
Cheque collections
Direct debit collections
Domestic incoming transfers
Virtual IBAN
Virtual accounts
International incoming transfers
Card acquiring

Payments & collections

The popularity of the smartphone in South Korea, the adoption rate is close to 100%, has meant the country has been one of the first and fastest adopters of digital payments. Popular mobile payment providers include Toss, N-Pay and KakaoPay. Pre-paid ‘smart’ cards, such as CashBee, are also increasingly popular. At the end of Q4 2023, pre-paid card usage had increased by 21%. In 2023, credit cards were the most popular payment method in volume terms, and the credit transfer in value terms.

Electronic banking services are available from all banks. There is no national electronic banking standard in South Korea, so companies use banks’ proprietary services.

Online and mobile banking services are provided by the country’s leading banks; there are 63 online and mobile banking services providers. There were 169 million individual internet banking users at the end of 2022 and 11 million corporate internet banking users. According to the central bank, the volume of money transfers carried out online in 2023, surged 19.2%.

Short term investments

Interest payable on credit balances

  • Interest-bearing current and checking accounts are not permitted.

Demand deposits

  • Demand deposits denominated in KRW or major foreign currencies are available for an indefinite term as long as the account is opened. .

Time deposits

  • Time deposits are available in KRW or major foreign currencies with terms ranging from overnight to 1 year.

Certificates of deposit

  • Domestic banks issue certificates of deposit with terms ranging from 30 days to over 12 months. Terms of three months are most common.
  • Certificates of deposit can be issued paying fixed or variable interest.
  • The minimum investment amount is KRW 10 million.

Treasury (government) bills

  • Treasury bills (T-bills) are issued by the government with maturities of less than one year, and typically with a maturity date of 63 days.
  • The Ministry of Economy & Finance issues Korea Treasury Bonds with maturities ranging from three years up to 50 years.
  • Monetary Stabilisation Bonds (MSBs) are issued by the BoK. Maturities range from 14 days to two years. Short-term MSBs have a maturity of less than 28 days.

Commercial paper

  • Domestic commercial paper is issued in the form of unsecured promissory notes. Most paper is issued for terms up to one year.

Money market funds

  • Domestic money market funds are an increasingly popular short-term investment instrument in South Korea.

Repurchase agreements

  • Repurchase agreements with maturities ranging from overnight to one year are commonly available. There are ten standardised repo terms: overnight, two days, three days, four days, seven days, 14 days, 21 days, 30 days, 60 days, and 90 days.

Bankers’ acceptances

  • Bankers' acceptances are not commonly used in South Korea.

BNP Paribas Trade Finance Capabilities

Documentary credits
Documentary collections

International trade

  • As a member of the Asia-Pacific Economic Cooperation (APEC) forum, South Korea has agreed to liberalise trade and investment rules between members.