Shinhan opens first Korean bank in Myanmar Shinhan strengthens Asian financial belt
Shinhan Bank’s Myanmar employees serve customers at the bank’s Yangon Branch last Tuesday. Shinhan is the first Korean bank to start operations in the Southeast Asian country. / Courtesy of Shinhan Bank
By Yoon Ja-young
Shinhan Bank started operation in Myanmar, Sept. 20, opening the first Korean bank branch in the Southeast Asian country. The branch in Yangon adds to Shinhan’s global network of operations in 20 countries, bolstering its Asian financial belt linking the Philippines, Singapore, Vietnam, Cambodia and Indonesia.
Shinhan has been expanding its global financial reach. On top of Japan, China, Vietnam and Cambodia where it has been operating successfully, it advanced into Indonesia which boasts a 250 million population and Myanmar, an untapped market for Korean banks. It added Australia to the list, expanding its scope to the Pacific region.
Amid rapid changes in the financial world, the country’s banking industry has been in need of diversifying profit sources as well as securing new growth engines. Since his inauguration in March last year, Shinhan Bank CEO Cho Yong-byoung has been stressing global expertise for Shinhan to make a leap forward as a world class player. Globalization has been one of the keywords in Cho’s leadership.
Along with the traditional strategy of seeking “organic growth,” the bank is considering diverse options such as mergers and acquisitions in emerging markets or markets with long-term growth potential, as well as equity investment and strategic partnerships.
On top of advancing into new countries, the bank has expanded its previous network through localization. Shinhan’s overseas network has more than doubled since Cho’s inauguration, from 72 in 16 countries to 147 in 20 countries. In Vietnam, for instance, it is scheduled to open four more branches to pull up the total number to 18, which will make Shinhan the foreign bank with the most extensive network in the country.
Localization is the most important strategic keyword in Shinhan’s global business. It aims at providing the best financial service to local customers, and launching country-tailored products and services on top of diverse local marketing activities.
Among such localization efforts is Shinhan Bank Vietnam’s credit card business. Four-and-a-half years since its launch, the business has 140,000 card holders, making it one of most notable success stories of a Korean business there. Nine out of 10 customers are Vietnamese. The localization of human resources is also accelerating, with local employees taking key roles.
Shinhan started off with Asia where it has a competitive edge. In addition to numerous Korean businesses which are potential customers, Shinhan benefits from cultural similarities. Now, it plans to go beyond. Shinhan plans to continue expanding channels in regions other than Asia, such as Mexico and Australia. “Based on Asia, we plan to make a leap forward as a global bank in the mid- to long- term. We will make 20 percent of our profit from the global business by 2020,” Cho said. Global business made up 10.5 percent of Shinhan’s profit in 2015, a jump from 2.9 percent in 2010.