With Merger Complete,
a New Shinhan Looks Abroad

CEO Shin says bank will focus on new growth engines

President Shin Sang-hoon of Shinhan Bank said this year the bank will work on consolidating its operations to withstand any difficulties that may come its way in an uncertain financial environment.
The bank's management will focus on sound and stable growth rather than expanding its assets.
The CEO said the bank was able to meet its target of merging its operations with Chohung Bank as called for in its strategy early last year. The bank absorbed Chohung successfully without a hitch and the integration reached the labor union.
The bank has also been able to undertake a large personnel reshuffle in which some officers and staff took honorary retirements in order to create a new bank out of the merger with Chohung, Shin boasted.
As of the third quarter 2007, the bank was able to record 1.86 trillion won in net income, up 31 percent from the same period in the previous year, fully meeting the projection made early in the year in both scale and profit-loss aspects and market expectations.
The bank has also been successful in attracting 1.3 million settlement accounts to create a synergy between the bank and Shinhan Card, which took over LG Card.
Shinhan also took over a bank in the U.S. and set up a local subsidiary in Cambodia to expand its global banking network for enlarged customer and profit bases.
But this year, uncertainties loom large in the financial sector due to high oil prices that could lead to a global credit crunch and a slowdown in U.S. economic growth in the wake of the subprime loan crisis.
Shin said he will focus continuously on correcting ineffective sides of the bank's management and search for business areas that will ensure the bank's future growth by building a stable base.
The bank will also push its overseas operations in such areas as investment banking and private banking with a segregated profit structure to deal with so-called "money move"― the flow of money out of banks to stock markets. The bank has been searching for a means to build a "CIB"bank, integrating IB with commercial banking.
The bank will continuously search for new growth areas in international banking to build a new growth base. Foreign financial markets easily accessible and promising to the bank will be approached first in order to expand the bank's overseas operations, Shin said. "The bank will land its operations in foreign financial markets where its products and services can be competitive."With that in mind, Shinhan took over a bank not owned by Korean expatriates in the U.S. and set up a local subsidiary in Cambodia last year. Now, the bank is looking at Canada and Kazakhstan to set up local subsidiaries as well as expand its operations in China. It has already obtained various licenses to enlarge its business in the neighboring country from the financial authorities at home and is working to conduct financial businesses in China through its subsidiary.
Shin said Shinhan will develop a business model for each of its operations in foreign countries for successful localization aimed at becoming a leading financial organization in each of the countries it operates. The most important thing is for those overseas Shinhan affiliates to win the trust of local customers so that they can grow to be global financial players holding high public confidence.
Shinhan has become the second largest bank in the country following its merger with Chohung Bank, with assets totaling around 203 trillion won. Kookmin Bank remains the largest commercial bank in Korea.
Shinhan Financial Group, the holding company for Shinhan Bank, is poised to foster its investment banking wing, now that the Capital Markets Consolidation Act is ready to come into force next year.
The new financial law will remove the barriers in the financial industry, allowing financial firms to operate more than one kind of financial business.
Shin said the new Shinhan Bank has been running along at the pace set forth to meet customers'high expectations and, as a result, the bank succeeded in completing IT and institutional integration, among other aspects of integration within a relatively short period of time.
He said the new Shinhan will mature into a "World-Class Bank"serving as a bulwark for the Korean economy. nw

President Shin Sang-hoon of Shinhan Bank.