By Kang Seung-woo
Marking the 10th anniversary of its establishment as a financial holding company on Sept. 1, Shinhan Financial Group is gearing up to make inroads onto global stages as a future growth engine.
Beyond the nearly-saturated local financial market, Shinhan is seeking to increase overseas profits with its sights on evolving into a global financial holding company.
“Considering the nation’s current low growth and aging population, it is definitely necessary for Shinhan to enter Asian markets and find a future growth engine,” Shinhan Financial Chairman Han Dong-woo said in his speech on the company’s foundation day.
It is China and a few emerging countries in the region that Shinhan is focusing on as core Asian markets because they are currently showing continuous economic expansion and possess huge potential.
The chairman said that on the back of the entries, Shinhan will boost its overseas profits from current 3 percent to 10 percent.
Shinhan Bank, the flagship unit of the financial services firm, is leading the pack of the group’s affiliates in terms of overseas expansion, having spread to 14 countries that have 54 branches as of the end of August 2011. In addition, 10 of them are local subsidiaries.
“Since the beginning of overseas expansion, we have made much of localization, and that’s why we have gone abroad in the form of local subsidiaries,” said a Shinhan Bank official.
In 2007, the bank established Shinhan Khmer Bank in Cambodia, followed by Shinhan Bank China and Shinhan Bank Kazakhstan in 2008.
Shinhan Bank Japan and Shinhan Vietnam Bank were founded in 2009.
By the end of this year, it plans to set up six or seven more units to strengthen its grip on Korean companies operating overseas.
In China, Shinhan plans to set up a branch in Changsha, Hunan Province in October, the first among Korean banks, while making efforts to increase the market share in Japan, with two business units.
Indonesia, Southeast Asia’s largest economy, is a Shinhan target of late.
The country’s economy has grown 6 percent or 7 percent annually and Korean firms are actively advancing into its markets.
As a result, Shinhan Financial is considering a variety of options including mergers and acquisitions (M&A) and the establishment of corporate units in order to enter the market.
“Since the global financial crisis broke out in 2008, we have closely monitored the Indonesian market and strived to make visible achievement this year,” said an official of the nation’s third-largest financial group by assets.
Its other affiliates are taking advantage of Shinhan’s global networks.
In May, Shinhan Card started doing business in Vietnam in cooperation with Shinhan Vietnam Bank, while Shinhan BNP Paribas Asset Management set up a Hong Kong subsidiary this year.