President Cho Yong-byoung of Shinhan Bank.

Shinhan Bank has been doing extremely well in Vietnam, winning accolades for its successful operation in the Southeastern Asian country. It’s an example of a Korean bank’s successful overseas venture, which is a stark contrast to other Korean industries.

The Sunny Bank, a local subsidiary providing mobile banking service launched by Shinhan Bank in Vietnam in December 2015, has already secured over 10,000 customers. The figure represents some 12.5 percent of the bank’s local customers with more than 300,000 won in their deposit accounts on average.

The Sunny Bank is a unique business model. It provides non-financial services by making its content on Hallyu, Korean-style fashion, entertainment and literature, among others, available to customers, in addition to credit card and loan services.

The bank did not advertise in local media to publicize its presence, instead it was able to secure customers through SNS and the word of mouth. 

In addition, the bank is in the process of developing online platforms to create synergy with other affiliates of Shinhan Financial Group. An official of the bank said new subscribers of the Sunny Bank sometimes exceeded 1,000 daily. Ninety percent of them are in their 20s and 30s. 

Word of mouth advertising and providing diverse cultural contents has become a successful model for the bank’s strategy to build its Asian Fintech banking.

Shinhan Bank will open four more branches in Vietnam this year, giving it the largest presence for a foreign bank in the Southeast Asian country with 14 branches, nudging past Hong Kong Shanghai Bank Corp. According to the financial authorities in Seoul, Shinhan Bank got permits from the Vietnamese financial authorities to set up four new branches in key cities including Hanoi and Ho Chi Minh City. Those will bring the total number of branches in Vietnam to 18.

Among foreign banks operating in the host country, only Shinhan Bank got the permits to open four branches two years in a row.

President Cho Yong-byoung has been pushing an expansion strategy of the bank’s global operation ever since he became the top manager last year, with Vietnam becoming the launching base for his global strategy.

The bank will also give importance to localizing its operation overseas by hiring more local staff, including branch managers, to run the operation and service local customers.

Shinhan Bank Vietnam has some 300,000 customers and about 95 percent of them are local citizens. But their deposits account only 35 percent of total deposits.

The bank plans to strengthen its retail banking operation in Vietnam by expanding both deposits and loans for local customers.

A number of dignitaries led by President Cho Yong-byoung cut the tape in a ceremony to open the bank’s branch in Haiphong, Vietnam, on June 7, 2015.(Photos:Shinhan Bank)

Shinhan Bank in Myanmar

Shinhan Bank got a permit to set up a branch in Myanmar, becoming the first Korean bank to get a permit Myanmar’s financial authorities. The bank plans to set up its first banking outlet in the S.E. Asian country in the first quarter of next year, the bank said recently.

Woori Bank and KEB Hana Bank have operations in the S.E. country in the form of micro-financial systems, not full banking branches. The bank plans to open its first branch in Yangon, the capital.