Kang Seung-woo is the Business Desk editor at The Korea Times. Prior to this position, he covered politics, national affairs, finance and sports.
Shinhan maps out overseas expansion
By Kang Seung-woo
Staff reporter
Shinhan Bank has made a bold foray into international territory in its ploy to overcome local financial market saturation.
The 2008 recession brought about a seismic change in the global financial industry, giving the lender an opportunity to expand overseas.
Shinhan CEO Lee Baek-soon has started looking beyond local borders since 2007, setting up Shinhan Khmer Bank in Phnom Penh, Cambodia.
Korea's third-largest bank has been gaining steam in its global banking service, beefing up its business all over the globe.
In 2008, the financial institution established Shinhan Bank China and Shinhan Bank Kazakhstan, and founded last year were Shinhan Bank Canada, Shinhan Bank Japan and Shinhan Bank Vietnam.
As of March 2010, Shinhan Bank established 48 global networks in 14 countries and 10 out of 48 are local subsidiaries.
Future plan for global business
Thus far, foreign branches of Korean lenders have mainly dealt with Korean residents abroad, but Shinhan is pursuing a different path, reaching out to local people.
Along with the localization, different marketing skills, know-how of customer management and risk management will be used to appeal to local customers, bank officials said.
Shinhan will focus on strategically-important Japan, China and the United States, and emerging markets, such as Vietnam and India.
As part of nurturing local labor forces in the global market, Shinhan Bank launched "Global Jump Manager" last month.
The program invites 10 employees, who are promising and loyal to the bank, from overseas branches in the United States, Japan, China and Vietnam and gives them training sessions at local branches for nine months.
The session will teach them about the corporate culture, job skills, global leadership and Korean language.
"The program is Shinhan Bank's de facto first step toward localization," a Shinhan Bank official said.
"We will try our best to become a world class global player after producing competitive talent through the program."
By Kang Seung-woo
Shinhan enjoys 1st quarter earnings
Shinhan Bank, the flagship unit of the Shinhan Financial Group, logged a net profit of 588.6 billion won in the first quarter, up 698.3 percent from the previous year.
The lender's net interest margin (NIM), a barometer for banks' profitability, reached 2.18 percent in the first quarter, up from 2.01 percent three months earlier to nearly recover to the pre-financial crisis level.
Shinhan Bank also gained a one-off after-tax profit of 121.3 billion won ($100 million) last quarter by unloading its stake in Hynix Semiconductor in mid-March. Creditors of Hynix Semiconductor have raised 923.2 billion won by selling its 6.67 percent stake in the world's second-largest memory chipmaker through block trade.
In addition, Shinhan Bank has helped North Korean defectors settle in the South.
The lender is responsible for educating them in cooperation with the Ministry of Unification since February 2005, providing a basic financial class once or twice a month.
In addition, it has installed a help desk at its headquarters in Seoul.
As far as corporate social responsibility (CSR) is concerned, the bank, which signed a partnership with the Red Cross in April 2007, has been involved in a variety of social-service activities, such as blood donation and environmental protection.