Shinhan Bank receives top credit rating in Indonesia

By Jhoo Dong-chan

Shinhan Bank Indonesia, the Korean bank's corporate body in the Southeast Asian country, has received the top credit rating of AAA from the Pemeringkat Efek Indonesia (PEFINDO).

The PEFINCO is Indonesia's state-run credit rating agency established under the initiative of the Financial Services Authority of Indonesia in 1993. It is also the nation's oldest and most trusted rating agency that has since rated more than 700 companies and regional governments.

Shinhan Bank established its corporate body in Indonesia in December 2016 as part of the lender's efforts to diversify its revenue sources to overcome Korea's saturated financial market.

Thanks to its solid financial structure and various revenue sources with differential risk management system, Shinhan Bank Indonesia managed to receive the AAA rating, the bank said in a press release.

Only a few banks, including state-run Mandiri Bank, have managed to receive the top credit rating from the agency.

"It's meaningful to receive the top credit rating side by side with Indonesia's largest banks. They are nearly 100 times larger than Shinhan Bank Indonesia in terms of total asset volume," a Shinhan Bank official said.

"We will continue to strengthen and diversify Shinhan Bank Indonesia's revenue sources while looking for opportunities for further growth."

Shinhan Bank Indonesia added it will be able to attract more corporate deposits while issuing bonds with lower interest rate thanks to its top credit rating assigned to the bank.

Shinhan Bank Indonesia's total asset is estimated to be about 922.8 billion won (12 trillion Indonesia rupiah) with a non-performing loan ratio of less than 0.3 percent.

Separate from its business in Indonesia, Shinhan Financial Group is considered to be the most active player in the Southeast Asian market.

Shinhan Bank also established its local corporate body Shinhan Vietnam Bank in 2009, and in the retail finance sector acquired Australian-based banking firm ANZ Vietnam last April.

Shinhan Vietnam Bank is now the largest foreign bank there with assets worth a combined total of $3.3 billion. It also has about 900,000 customers.

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