South Korea’s Shinhan Bank has officially launched its operations in Indonesia via Shinhan Bank Indonesia, a move that is expected to help the Korean bank expand its presence in the Southeast Asian country and across Asia.
Shinhan Bank said May 18 that it officially launched Shinhan Bank Indonesia, which was renamed from the Jakarta-based Bank Metro Express (BME). The Korean bank acquired BME along with its 19 branches last year. Shinhan Bank Indonesia is newly headquartered in the International Financial Center Tower 2 in Jakarta, the capital city of Indonesia.
Shinhan Bank Indonesia’s launch comes in the wake the Korean bank’s overseas expansion in other Asian countries, such as Japan, China and Vietnam in recent years. The latest overseas operation is expected to help Shinhan Bank achieve its ambitious goal to build an extensive financial network across Asia.
The Korean bank also aims to merge Shinhan Bank Indonesia with Centratama Nasional Bank (CNB), another Indonesian bank that it took over last December. The Indonesian bank has 41 branches across Surabaya, the second biggest city in Indonesia, and other cities on Java Island.
Once the merger is complete, the Korean bank would have 60 networks across Indonesia, the world’s fourth most populous country. It currently has 141 overseas networks across 19 countries. It would also be the first in the Korean banking industry to purchase two offshore banks and merge them.
Cho Yong-byeong, the president of Shinhan Bank said at the launching ceremony that he expects the merger of the two Indonesian banks to set a new milestone in Indonesia.
Shinhan Bank has been speeding up its overseas operations since March, when President Cho Yong-byeong took over as the CEO of the bank by setting up a wholly-owned subsidiary in Mexico. The new president is known for his expertise in international banking.
Cho has been credited with boosting the bank’s overseas earnings by 0.5 percent to 9.2 percent of total earnings in the first half. The bank opened six overseas branches since he took over as CEO. Before Cho took the helm of the bank, it had been opening three to four new branches overseas annually.
Shinhan Bank won a license to set up a wholly-owned subsidiary in Mexico from the Mexican financial authorities, CNBV a first for a Korean bank. The bank plans to launch the subsidiary this year.
Mexico has many foreign companies with operations in the Central American country, with a number of key Korean companies among them, including Samsung Electronics, Hyundai Motor and its sister Kia Motors, LG and POSCO. Shinhan Bank’s subsidiary in Mexico will provide financial support to those Korean firms operating in the Central American nation and serve the local community.
Cho has been emphasizing the importance of international finance to the officers and staff of the bank ever since his term began in March. Since May, he has been embarking on exploratory tours to a number of the countries, including India, Indonesia, China and Vietnam to check on the bank’s operations there.
With loan interest rates so low in Korea, the new CEO plans to boost the overseas operations of the bank to help expand its earnings this year. He plans to have the bank’s overseas branches localize operations in line with the trends of the financial markets of the countries they operate in for such areas as organization, commodities, marketing and other areas of operations.
The bank’s international operations have been growing under Cho’s leadership. The six new branches opened under his help are located in China, Vietnam and Indonesia; the bank will soon open branches in the Philippines and Dubai.
Shinhan Bank will have 82 branches in operation in 18 countries by the end of this year; up from 70 branches in 16 countries last year. The bank has also signed a contract to take over a local financial firm in Indonesia.
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