Overseas for Profit Expansion

Shinhan Bank continues to expand its 48 global banking network in 14 countries with no room for expansion at home

Shinhan Bank has been promoting its overseas operation expansion as the banking business boundary has been removed with the implementation of the Capital Market Consolidation Law and to overcome the saturation of domestic financial market.
The bank also saw that since the development of the financial crisis, the big players have been regrouped, agreeing that the domestic financial market has no room for further growth and now is the time to work for global expansion of domestic banks.
The bank has been working hard to expand its global operations since 2007 with the set up of the Shinhan Khmer Bank in Cambodia. The bank launched the Shinhan Bank China Corp. Limited and Shinhan Kazakhstan in 2008 followed by Canada Shinhan Bank, Shinhan Bank Japan and Shinhan Bank Vietnam last year, along with wholly-owned subsidiaries in major financial markets in the world to secure a base for the bank’s long-term growth in global operations.
The bank as of March, maintains 48 global network in 14 countries including 10 locally incorporated subsidiaries, which are considered very good in quality.
The bank has been all out to strengthen its global operation capacity under a new strategic idea that its global network is not just an overseas operation, but it is a bank within bank.
The bank’s operational strategy for its overseas presence is to focus on the global retailing banking through the rebuilding of a selective network based on risk management under the theme of selection and concentration with what the global network the bank has built so far with its own efforts.
The bank plans to push the globalization strategy in overseas operations based on global retailing focused on localized capacity in securing local clients and local deposit funds for its global progress and improved basic structure. The bank will not settle for being a representative bank at home, and has taken the financial crisis ignited by the Lehman Brothers fiasco as a chance to become a leading bank in the familiar and proven financial market, minimizing risks to set up an ambitious plan to grow to be a leading regional bank and move toward the target a step-by-step.
Now is the time for the bank to change the paradigm for a new qualitative strategic growth and the bank feels that what kind of growth strategies it will make now would determine its global operations a number of years down the road.
If the bank continues to pursue its current strategies through multiple angled efforts, it will be able to achieve its target to become a leading regional bank at the financial market it has now been operating. In the process, the retailing banking is projected to play a large role in the bank’s overseas operations.
To review the bank’s current status of its overseas operation by country; In Japan, Shinhan Bank Japan(SBJ) is the second locally incorporated foreign bank in Japan after Citibank, which is very significant in light of the fact that a number of foreign banks failed to set up their local subsidiaries and some of them are still in the process of doing that.
The ultimate objective of SBJ is to secure a firm base to serve local customers with local funds like native Japanese banks in its mid-to-long term management strategies, although it has been focused on serving Korean residents in Japan as its primary customers. In order to expedite the SBJ’s localization, a Japanese banker has been hired as the branch manager for the Uehonmachi branch in Osaka. It had only three branches at the time of its opening, they now total five with two new branches opened since then and will have more branches down the road gradually.
In China, Shinhan Bank set up the Shinhan Bank China Limited in May, 2008 and put the four existing branches already in China. The bank continues to set up branches and outlets, 10 in all in such cities as Beijing, Shanghai Tianjin, and Qingdao. More branches and outlets will be set up in China in the future.
The bank plans to continue to push the localization of its Chinese operations as it obtained the license to deal with local customers directly in local currency as part of its localization strategy including the retail banking.
Shinhan Bank Vietnam won the Excellent Achievement of Banking Activities in the Year 2005 from the Central Bank in Vietnam in 2005 and repeated the feat again in 2007. The Vietnamese financial market has the largest potential as only 10 percent of the country’s 80 million strong population has bank accounts and their annual income has been increasing every year in recent years. nw

Shinhan Bank President & CEO Lee Baek-soon