Improving Financial Market

Shinhan Bank to expand overseas operations in the U.S., Japan, China and Vietnam as climate for financial markets get better this year

President Lee Baek-soon of Shinhan Bank said he will steel the bank this year to focus on making a large chunk of its profits from its overseas operations as the domestic financial market is too crowded and near the saturation point with competition becoming too stiff.
During a recent interview with media, the veteran banker said the bank will focus on its major financial markets like the United States, Japan, Vietnam and China to expand its operations for greater profits and also eye emerging markets, such as India, for expansion.
Lee said the investment climate this year will be better than it was last year, but no better than 2007, the boom year for overseas expansion. But, he added, the bank will make moves within its power to strengthen its global capacity under a long-term outlook.
On the operation of Shinhan Bank Japan, which opened in September last year, Lee said the bank has been catering to Korean residents in Japan and then is expanding its customer base to local people to the extent that the bank will grow to become a top bank in Japan.
The subsidiary had three branches in Tokyo, Osaka and Fukuoka, but opened more branches in Tokyo in such areas as Uehonmachi and Ueno and plans to open more in other cities. The Uehonmachi branch is headed by a Japanese manager in line with the bank’s plan to secure more local residents as customers.
Lee was very cautious in the bank’s M&A moves overseas. He said they know M&As are a shortcut for the bank to become a global entity, but he cited the lack of information, political risks, different cultures, regulations and supervisory systems as factors that could spell failure and, therefore, moves have to be gradual under mid-to-long-term perspectives.
On the bank’s management objectives for this year, he said it will expand the amount of transactions by 6.5 percent, reflecting the GDP growth and inflation rates projected for this year.
Lee said the bank’s growth will be made in real terms based on healthy assets and expects net income at the end of the year to exceed 1 trillion won.
On management strategies, the CEO said they will be conservative, keeping in mind a possible double dip in the economy, but the bank will provide pre-emptive support to exporters and companies in the green growth sector and companies with superior technologies and other companies with bright outlooks.
Lee also ruled out an M&A with another domestic bank. He said the M&A with Chohung Bank has been a resounding success and achieved an economy of scale to a certain degree and therefore, they no longer need to consider another M&A unlike other banks. Other banks may have bigger assets than Shinhan through M&As, but Shinhan will be able to operate under stable conditions, he said. nw

President Lee Baek-soon of Shinhan Bank.