Friday, May 29, 2020
Shinhan Bank Pushing for Asian Financial Belt
[Special Report on Financial Industry]
Shinhan Bank Pushing for Asian Financial Belt
  • By Yoon Young-sil
  • May 30, 2018, 12:42
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four branches
Shinhan Bank Vietnam holds a ribbon-cutting ceremony at Bac Sai Gon Branch in Ho Chi Minh City, which is one of the four branches that opened in Vietnam on May 17.

Shinhan Bank has been making continuous investments in its global operations after selecting the global business as one of its core business areas for future growth. Currently, Shinhan Bank overseas network consists of a total of 162 subsidiaries, branches and sales offices in 20 countries. Since 2010, Shinhan Bank has been pursuing a global strategy founded on the “Asian Financial Belt” and “selection and focus.”

The proportion Shinhan Bank's global business in its total net profits has been steadily rising from 5.37% in 2011 to 8.7% at the end of 2014, to 12.0% at the end of 2016 and 13.7% at the end of 2017. The bank’s mid- to long-term goal is to boost the ratio to 20% by 2020 and to become a global bank based in Asia.

While pursuing organic growth, Shinhan Bank has also been seeking to expand its overseas business through flexible investment strategies such as equity investment and M&As. In 2016, it merged Bank Shinhan Indonesia (BSI), Shinhan’s subsidiary in Indonesia, and Centratama Nasional Bank (CNB), another bank in Indonesia.

In April 2017, the bank acquired ANZ Bank’s Vietnamese Retail Division in April, completing integration of the division into Shinhan Bank Vietnam in December last year. This is a representative example. Shinhan Bank is looking for strategic targets in the Southeast Asian market in order to make additional M&A deals.

Shinhan Bank will steadily expand its global channels based on its Asian banking belt that links India, Myanmar, Cambodia, Vietnam, Singapore, Indonesia, Hong Kong, the Philippines, China and Japan.

In particular, Shinhan Bank successfully completed the acquisition of ANZ Bank’s Vietnamese Retail Division on December 18 and its integration into Shinhan Bank Vietnam. As a result of the successful acquisition, Shinhan Bank Vietnam has grown into a top foreign bank in Vietnam with US$3.3 billion in total assets, 240,000 credit card members, 900,000 customers and 1,400 employees.

In particular, Shinhan Bank Vietnam’s balance, which stood at US$7 million at the end of 2012, surpassed US$700 million after the integration, recording 100-fold growth in five years. Shinhan Bank Vietnam is recognized as a successful case of localization as more than 99% of the customers who received loans from the bank are local residents.

On December 15, 2017, Shinhan Bank acquired a license to start banking operations in Mexico. In March this year, the bank opened Shinhan Bank Mexico, becoming the first Korean bank to make presence in Mexico. It was more than 10 years after the bank opened its Mexico office in November 2008 to tap into the country’s growth potential.

The Japanese market is called “graves of foreign financial institutions.” Currently, Citibank and Shinhan Bank Japan (SBJ) are the only two foreign banks operating local corporations in Japan. Citibank focuses on corporate banking and only SBJ is doing the retail banking business for local residents.

Currently, SBJ is chalking up the best business performance among Shinhan Bank’s overseas corporations. SBJ’s growth in Japan is attributable to intensive localization efforts. It shifted its sales focus from internal trade with its parent bank in Korea and transactions with Korean companies operating in Japan to local resident loans such as housing loans.

Based on this global network, Shinhan Bank is pushing forward with a localization strategy to develop excellent human resources and build organizations and infrastructure, continuously develop products and services matching each country’s characteristics and carry out various marketing activities with the goal of increasing local customers through the provision of the best financial services for customers in local markets.