By Yoon Ja-young
Staff Reporter
The financial industry is facing a new round of competition this year amid strengthened regulations and the integration of financial businesses. Shinhan Financial Group, which set up "Trust 2010, Sustainable Future, Reliable Shinhan" as its strategic objective this year, is focusing on maximizing mid-to long term corporate value rather than seeking growth in bulk.
The group aims at breaking into the global top 50 and Asia's top 10 firms by 2012. It successfully set a stable income basis through balanced portfolios comprising of banks as well as non-banks.
It includes setting up sustainable, customer-oriented businesses, and seeks differentiated growth and the enhancement of synergetic effects.
More concretely, Shinhan is seeking to establish a strong corporate culture, establishing what it calls the "Shinhan Way." This will include defining the group's value chain, as well as setting up a new HR and business system.
It is also seeking more synergetic effects between subsidiaries. For example, Shinhan plans to meet customer needs by gathering personal information, and preparing the products and services of each Shinhan subsidiary to meet their needs.
Shinhan, however, acts carefully when it comes to M&As. Currently the local financial market is expecting various M&A scenarios between banks, but Shinhan has determined that simply increasing bulk through M&As won't help enhance corporate value much.
"Since setting up the holding company, we've set up portfolios for each business, and have brought the economy of scale to a certain level in each of the major industries, such as banking and credit cards," said a Shinhan representative. Hence, Shinhan is likely to seek a solid growth track on its own, enhancing effectiveness and profitability based on stability, rather than seeking M&As.
Meanwhile, Shinhan is bolstering efforts in overseas markets. The group set global business as one of the core business areas for the mid to long term, and is regarding it as a future growth engine.
Currently, the bank has advanced into 14 countries with 47 networks, and Shinhan Investment has four networks in four countries. It will bolster funding in Japanese markets, and seek localization by setting up a retail business model. In the Chinese market, Shinhan is considering expanding businesses in promising areas and strengthening localization and sales.
The group's non-bank subsidiaries are monitoring emerging markets and other promising markets, preparing to advance whenever they have the chance. The ultimate goal of the group is maximizing global synergy based on the strength and professionalism of each subsidiary.