Shinhan to prioritize stability over growth in 2012: chief

Shinhan Bank, Korea's No. 3 lender, plans to focus on risk management this year as Europe's debt crisis and mounting household debts are feared to damp economic growth at home and abroad, its chief said Thursday.

Suh Jin-won, president of Shinhan Bank, said the bank has lowered its target growth rate for this year from the previous year due to slowing global economic recovery.

"We expanded around 7 percent last year but we are aiming for around 4 percent growth this year," Suh said in an interview with Yonhap News Agency. "We will focus on stability rather than growth to reinforce risk management."

Heightened competition with larger rivals, such as Kookmin Bank, Woori Bank and No. 4 lender Hana Bank, which is set to take over Korea Exchange Bank, is forecast to squeeze Shinhan's net interest margin, a key gauge of profitability, Suh added.

Shinhan Bank, the flagship unit of Shinhan Financial Group Co., is among a string of lenders in the country that are pursuing conservative management strategies this year.

With Europe's sovereign debt crisis feared to hurt export-driven countries like Korea and dampen growth of household and corporate income, South Korean banks are girding themselves for one of the most challenging years since 2008.

While Shinhan plans to rein in expanding household credits and mortgage loans, it will continue to prop up asset management services for high-income earners while seeking potential takeover targets in Southeast Asia, the president said.

"We are in talks to take over a local bank in Indonesia," Suh said. "We will complete an Asia financial belt by linking China, Vietnam, India, Kazakhstan and other countries." (Yonhap)