In his congratulatory speech at a ceremony celebrating the group’s 14th anniversary, Chairman Han Dong-woo of Shinhan Financial Group said that all of the group’s affiliates should operate like the same company to cope with current trends in the financial market, indicating that the walls that separate the financial sectors have been falling.
The event on Sept. 1 was held at the group’s head office in Sejong Boulevard in Seoul.
The chairman also said competition patterns in the financial market have been changing with the development of ICT and the loosening of the financial regulations. The emergence of various ITs means that a bank’s clients don’t have to visit a bank to deposit or withdraw money and get loans.
“We should look around to see if we are not following the trends satisfied with the success of our current operation,” the chairman cautioned.
Han urged each affiliate of the group to boost cooperation to cope with the changing trends in the financial market, noting that the moves for cooperation between securities and banks have not done much except setting up a framework for cooperation.
To cope with the changing trends in the financial market, the chairman said we have to make all of the affiliates of the group operate like one company.
He also called for the strengthening of their overseas operations, especially in the area of localization, when it comes to doing business with local communities like a native financial institution and boost their earnings.
The group’s overseas earnings amounted to 51.3 billion won, which is four times more than the fourth quarter of the previous year. The results include loan loss provisions for the whole year. The first quarter earnings surpassed those for the first and third quarters of the preceding year thanks to excellent performances turned in by Shinhan Bank’s overseas branches. The bank has 74 branches including offices and other outlets in 16 foreign countries. The overseas branches and other outlets posted 37.8 billion won in profit in the first quarter, even surpassing 37.1 billion won in profit in the second quarter of last year, which was the largest by an overseas branch since the opening of the bank’s Osaka branch in Japan in 1986.
Shinhan Bank’s overseas earnings increased with its earnings share, rising to 9.8 percent from 8.7 percent, helping the group’s total earnings to expand substantially. Its net interest margin fell in the period by 0.19 percent.
With low interest rates in Korea, financial authorities here said domestic financial institutions have no where to turn to make profits except overseas.
In the meantime, the group’s outstanding performances have been an outcome of its “Compassionate Finance” strategy, meaning to work for the benefit of the world.
Compassionate Finance has become the foundation for judgment and direction for its management in conducting all of its assigned tasks. Some in the financial market think the ideal helped the group’s management strategies put the group where it is today. However some expressed doubts if the foundation can go as far as taking root in the financial market when all kinds of risks still exist.
Since 2011, the group has outperformed its rivals, giving the market confidence in its management tenant.
The group not only outperformed others, but it’s also strengthened the management tenant of “Compassionate Finance” as a broader part of its brand power, and in doing so boosting its reputation at home and abroad.
“Compassionate Finance that travel together in the future” has become a representative slogan for the group. Shinhan pledges to work for the benefit of the world. It will build a new structure for mutual survival together with customers with better financial products and services and fund management in the financial industry’s original operation areas.
Chairman Han’s respectable management ideal to not pursuing profits over the interests of customers won him the Top CEO in the Asia-Pacific Region award by the Asian Banker magazine. It was a first for a Korean banker.
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