Merger of Banks
- Shinhan Financial Holding to create new bank with Shinhan and Chohung Banks

President Choi Young-whi of Shinhan Financial Holding Co. said the financial industry faces a great battle ahead this year with the launching of Citi Bank in Korea, foreign banks preparing to engage in retail banking and domestic banks setting up holding companies.
In his speech before some 100 officials and staff of the Shinhan Financial Holding Group Jan.3 at Shinhan Bank head office, he said they have to successfully put together a framework for upcoming merger of Shinhan and Chohung banks this year.
To be prepared for the occasion, Shinhan Holding will build a base to be a leading bank, strengthening its role in the non-banking sector and create a corporate culture in harmony with the group's vision.
Strengthening of its role in the non-banking sector meant securing competitive power in the areas of credit card and investment trust operations.
It also means strengthening the role of investment banking to enter the bond and initial public offering markets. They will also try to enter the private equity market.
The group is taking this as an opportunity to step up further and become a global financial group competing with renowned foreign financial institutions at its home ground as many of them would be doing business in Korean financial market.
A key word for Shinhan's strategy in the next 30 years will be "new bank" to show that the merger of Shinhan and Chohung is not just a merger but it is more than that; It is a display of an intention to create an organization several steps upgraded under new strategy and action designs.
Shinhan Holding's Director Cho Byung-je said the integration of the two banks is a process of work to remake all of affiliates under the holding group as a new model based on changes in future environment.
He said the process is still at the beginning, but in September, a merger committee will be launched, along with the group's basic infrastructure.
The merged bank will have a total assets of 151.400 trillion won, almost catching up with Kookmin Bank, the largest bank in the country.
Bank sources said the merged bank would be able to compete with any foreign banks one-ion-one because it has a wide customer base of Chohung and topmost services of Shinhan.
Shinhan Holding has a bright vision. It has a dream to be the top company in terms of assets. With the launch of the new bank, it wants the bank to be a leading bank with the third place in the non-banking sector including securities, and credit card operations.
Banking sources said it is not going to be easy for Shinhan to take over Chohung Bank, which is an age old bank in the country with its long-standing history. Some are confident that Shinhan Bank would do the job well as it too has its own history in the banking sector as a strong bank.
Shinhan Bank is looking beyond the merger to be a global bank, taking it as a starting point for its global moves.
But there are shortcomings, critics note, to be a leading bank in Asia, along with Kookmin Bank.
Shinhan has lately been aggressively undertaking international financial dealings. It plans to set up operations in foreign financial markets such as in China, Southeast Asia, and North America, among others.
The bank already has operations in such key financial centers as New York, London, Tokyo, Hong Kong, in addition to Osaka, Fukuoka, Ho Chi Mihn City, Shanghai and Tianjin. nw