Overseas Banking
Shinhan Bank, will make a foray into Poland’s financial market next month at the earliest, the first time for a local bank to enter that market. On a similar note, the bank is actively mulling over the possibility of acquiring a local Polish bank in a bid to expand its global presence.
Shinhan Bank CEO Suh Jin-won said during a press conference on May 4 in Astana, Kazakhstan, where he was visiting to attend the Asia Development Bank (ADB) annual meeting, “The Polish authority gave us the green light at the end of April. Our office is scheduled to be set up either in the second or third quarter.” The bank is to advance into Poland via opening up a local corporation in Frankfurt, Germany.
The CEO cites a host of Korean manufacturers’ presences in Poland as the reason for making inroads into the country, and said, “Via our Polish office, we can cover further grounds such as neighboring countries including the Czech Republic and Slovakia. In overseas expansion, we would like to build grounds where local corporations are present, and to further expand into retail. Once we operate the office in Poland and if deemed necessary, we will upgrade it into a branch.”
Suh, after judging that the local financial market is saturated, is spearheading the policy to expand overseas through M&As.
In 2013-2014, all overseas branches and offices of the bank in 15 countries stayed in the black for two years in a row. On the back of its overseas success, the bank opened up Thornhill Branch in Toronto, Canada on April 11 of this year. The Thornhill Branch is the bank’s 68th overseas presence.
Regarding global expansion, the CEO said, “Establishing ourselves in a foreign market from scratch is no easy task, so an M&A is a good option for us. We are constantly hunting for a good buy. In this light, in Indonesia, in December last year, we inked the Stock Purchase Agreement to buy a 40 percent stake in their local bank, Bank Metro Express, and are considering a further acquisition.”
Amid mounting scandals involving local banks’ illicit loan deals in their Tokyo branches, Shinhan Bank came out unscathed. As for the reason, the CEO cited “risk management” and “complete localization.”
He said, “We have been operating in Japan for almost 30 years, so we know the market well and manage the risks via thorough credit analysis. Our Japanese branches can be virtually considered local banks since most deposit customers are locals, and 60 percent of the loans are taken out by locals.”
Regarding how the bank’s first quarter net profit grew 25 percent on-year, he judged, “Our asset portfolio is built in a way that it generates steady profits.”