Emergence
of Powerful Bank

The new bank to be named Shinhan Bank with Chohung Bank to remain as legal entity

Shinhan Financial Group recently announced that the name of the bank to be created with the merger of Shinhan Bank and Chohung Bank would be Shinhan Bank as agreed by the Integration Committee of the bank. Chohung Bank, however, will be retained as legal entity. The board of directors of both banks approved the decision made by the Integration Committee.
As part of the merger process, Chohung Bank will spin off its credit card operation and merge with Shinhan Card, a wholly owned subsidiary of Shinhan Financial Group. Integration of the two banks and spin-off of credit card operation is scheduled to be completed on April 1.
The new bank will create a compelling value and opportunities for customers, shareholders, and employees based on a balanced and complimentary mix in retail and corporate customer portfolio that is equipped with the second largest distribution network in Korea. According to the announcement by the Integration Committee, the name of the new bank, "Shinhan Bank"has been decided based on fair and objective results of brand preference survey executed by three independent survey agencies. The agency surveyed retail and corporate customers, domestic and foreign investors, and various expert groups regarding the naming process.
Currently, both banks are wholly owned subsidiaries of Shinhan Financial Group. Total shareholders'equity of the integrated bank will be 7.5 trillion won with a merger ratio of 3.86 Chohung Bank shares for one Shinhan Bank share with the assets of the new bank amounting to 175 trillion won with over 11,000 employees.
The organization of the new bank to be created out of the merger between Shinhan and Chohung Banks in April has been drawn up already. According to Shinhan Financial Group, the headquarters of the new bank will have four groups customer, commodity, planning and support with 12 groups, three headquarters and 56 departments under those divisions.
The current headquarters will be renamed and combined in order to cope with the expansion of the new bank's large business scale due to the merger. The synergy marketing and the change promotion headquarters will be created directly under the bank president with the new bank planning to pursue the maximization of synergy in marketing profit from the expanded customer base. The new bank will also continue to take care of any problems that may arise in the process of merger operations. The new bank will have customer groups for individual customers, private banking customers, special customers, institutional customers and integrated financial customers, among others, to secure synergy effect from providing services to those customers. There will be groups for funding, international finance and trust to upgrade the management of financial products. Planning and support units will be put under the management planning group, the information technology (IT) group, the risk management group, the credit analysis group, and the management support group. The reorganization has been based on a strategy to create a business model, focusing on the importance of strategic function and to strengthen the economy of scale and professionalism.
The new bank has also decided to give the group head title to the vice president of the bank and business headquarters under their responsibilities. The business headquarters will have four business lines such as group chief, business headquarters head, manager, office chief, and team chief.
Shinhan Bank opened in 1982 and constant innovation helped its growth as a leading bank in the country in such a short period of operation. The bank formed a holding company in 2001, and took over Good Morning Securities and created Good Morning-Shinhan Securities in 2002 to become the second largest financial services group in the country in terms of assets with the acquisition of Chohung Bank in 2003. The holding company also took over Jeju Bank to expand its scale of operation and created an advanced corporate governance structure for secure synergistic effects from those newly acquired financial companies. nw

Shinhan Financial Group President Lee In-ho.