Chairman Cho Yong-byeong of Shinhan Financial Group called for reforms over and beyond those performed in the financial industry to achieve its target of being a leading financial group in Asia in 2020 and also its position as the top financial group in Korea.
He made the comments at a ceremony marking the holding company’s 16th anniversary on Sept. 1.
At the ceremony at Shinhan Bank’s auditorium, he said the group should extend its operation not only to a variety of new financial areas, including the Fintech and Internet financial facilities, but also to non-financial areas to find the best practices to take them up and include them in its operation in a daring manner.
He said the strategic tie-ups the group signed with non-financial firms, including Amazon, are part of the group’s moves to take a fresh approach to reform. He called on the heads of the company’s affiliates to aggressively seek new markets for their firms’ products and growth opportunities while the group pushes for new M&As and other opportunities.
The chairman declared that he will try to make Shihhan a leading financial group in Asia by 2020 when he took over as the top executive of the group earlier this year, which is part of his plan to expand the overseas operations of the group based on the “2020 Project,” including stepping up M&A moves and other overseas operations.
The chairman also called for changes to the group’s business portfolio in line with the changes in financial market trends and major financial policies. He reminded them that companies refusing to adapt their portfolios, such as Nokia and Kodaq, became business history fast.
He said he will show off his preemptive leadership to have future growth engines power the new portfolio, noting the Shinhan Reits as being put together as the 13th new affiliate of the group. It is scheduled to be launched this year.
The new affiliate as a vehicle for the group’s indirect investment in real estate, providing a new investment solution for the group.Shinhan has been a top financial group its launch in 2001 in Korea in annual net profit. It’s the largest financial group in the country in terms of assets.
Shinhan Financial Group is about to take over Lotte Non-Life Insurance Co., making it an integrated financial group, filling the only weak point in its portfolio of businesses. The group has been known for picking up diverse financial affiliates to beef up its scale of operation, starting with taking over Chohung Bank in 2003 and LG Card in 2007.
The share of the non-banking sector including credit card and securities firms in the group’s net profit came to 35 percent last year, the largest among financial groups in Korea. When Cho took over as chairman in March, he reviewed the group’s list of the affiliates and found that the missing link was in the non-life insurance area.
He looked for an opportunity to take over a non-life insurance firm.
That opportunity came when Lotte Group put the Lotte Non-Life Insurance Co. on the market. Losing money every year since 2008, Lotte decided to cut its losses before IFRS17 for the was to be introduced in 2021 in Korea. The shareholders of Shinhan Financial Group made up largely of Korean residents in Japan knew first-hand that Lotte decided to sell the non-insurance affiliate as Lotte major shareholders include Japanese investors in Japan.