Moving Toward A Leading Global Mega Bank

Shinhan Bank Pres. Lee stresses team work to realize the dream and vision of a bank with a worldwide presence

President Lee Baek-soon of Shinhan Bank said the bank will not go for M&As with other banks to grow bigger until at least 2014, as stability and soundness are elements needed most by the bank for the time being, although its domestic rivals can threaten its operations through M&As with other domestic banks. Shinhan Bank will expand its overseas operations since the domestic financial market has reached a saturation point and no longer has room for further growth, thus Lee firmly believes that is what a true mega bank can do to be a global bank.
He said this is not the time for his bank to look for M&As since it already took over Chohung Bank and LG Card, although he knows that the bank will be more competitive if it takes over additional companies through M&As.
Rival banks can pose a threat to Shinhan by taking over other financial institutions, so Shinhan is working to expand the number of customers to preclude possible dangers to its operations posed by rival banks and devote its efforts to making its newly acquired firms stable in their operations, he said.
Lee said his bank has been looking at acquiring financial institutions in such countries as Japan, India and Vietnam, among others, which also divides up risks by moving assets overseas, helping make risk management easier for the bank.
In the past, the Korean banks focused on strategies to build their presences overseas, but now they want to firm them up by expanding operations in such countries as Japan, Vietnam and India, he said.
“But first, you have to consolidate your home base in order to be able to make a strong push in your overseas operations,” he said.
When Lee came to the bank in March 2009, the bank’s operation had not been smooth and he had to struggle to get it back on track.
Shinhan Bank fell behind its affiliate LG Card in terms of annual profit to the tune of 100 billion won when its annual profit for 2009 came to only 748.7 billion won compared to LG Card’s 856.8 billion won, losing its leading position to LG Card for the first time since it was launched in the financial group.
Lee is considered to have strengthened the bank’s operations during crises. He has been able to maintain the BIS ratio at 15.19 percent and the non-performing assets rate at around 1 percent even during the crisis.
Furthermore, the bank had a super Q1 with net profit rising to 588.6 billion won, up 219.7 percent from the preceding quarter and up a record 698.3 percent YoY, leaving bank officials confident that they will generate the largest profit ahead of all other affiliates this year.
Under Lee’s leadership, the bank has been generating increased profits in all areas of its operation, they said, and the bank will not have trouble meeting its operational targets, if not exceeding them.
Lee has been considered a corporate man who cares for the organization as a whole. He is often heard talking about loyalty, customers, business first, and a challenging spirit to keep the bank running successfully.
Lee cares highly for those talented employees who work for the bank as a whole, rather than those who care for themselves only as individuals, sources at the bank said.
Lee, for those reasons, served in a number of key posts along his way up the ladder as one of the important executives to take over for the bank in the Post Chairman Ra era.
He first entered Korea First Bank following his graduation from Duksoo Commercial High School in Seoul in 1971 and moved to Shinhan Bank when it was launched in 1982. He was chief secretary to the CEO of the bank, manager of the Teheran-ro Corporate Branch in southern Seoul, manager of the Tokyo branch in Japan and head of the SME Finance Headquarters at the bank, all important positions within the bank that a Shinhan man has to go through to be a top executive, the bank sources said.
In 2004, he was named an executive director of the bank and then vice president of Shinhan Financial Holding Co. from 2007 following a stint as the vice president of Shinhan Bank.
Lee always stressed that all executives and staff of the bank should form a body to realize the bank’s dream and vision as a team. nw

President Lee Baek-soon of Shinhan Bank.