Aim is to bring overseas profit share to 20 percent of its total profit as it launches consumer financing company it took over last year
Chairman Cho Yong-byoung of Shinhan Financial Group.
Chairman Cho Yong-byeong will soon visit Vietnam to lend a hand to Shinhan Card in getting the Vietnamese financial company it took over off the ground in the country’s consumer financial market as early as possible.
The financial group said on June 25 he will head to the S.E. Asian country with President Lim Young-jin of Shinhan Card on July 2 to attend a ceremony to launch the Shinhan Vietnam Prudential Consumer Financial Co.
The card company took over a 100 percent stake in PVFC at a cost of $151 million in January, 2018, and renamed it SVFC, which will continue to operate the businesses that the company had before the takeover.
The consumer financing company was set up in 2006 to operate such consumer financial businesses as loans on credit, and installment financing. The company netted 10 billion won in profit in 2016 to rank 4th among financial companies in Vietnam.
Chairman Cho believes that the work has been cut out for the consumer financing company to help expand the Korean financial group’s operation in the S.E. Asian country with the scale of the country’s consumer financing market projected at around 6 trillion won annually.
The personal loan market in Vietnam expanded 63 percent in the past three years and its prospect for growth looks very strong.
The Vietnamese economy is projected to grow 6 percent per year in the coming years, the credit card firm stated as part of its rationale for the takeover of the smaller loan firm and to enter the credit card market in Vietnam.
The financial group had been planning to enter Vietnam’s financial market, which is already contested by 178 financial firms from 20 countries.
A number of the financial affiliates have already been engaged in the country, including Shinhan Financial Investment and Shinhan Life through a local subsidiary.
Shinhan Vietnam Bank took over the Vietnam operations of Australian ANZ in April last year to rank as the top retail bank among all foreign banks operating there.
As of the end of 2017, Shinhan Vietnam had total assets of $3.3 billion with 240,000 people holding Shinhan credit cards. The number of customers totaled 900,000.
The group has its eye set on the non-banking side of its operation, with Shinhan Card taking over Prudential Vietnam Financial Corp.
The move is expected to give a big boost to Shinhan Financial Investment and Shinhan Vietnam Bank in expanding the number of customers from the synergy created from its takeover of PVFC.
President Lim Young-jin said the credit card firms will have a diverse operation in cooperation with its affiliates to work for “a global Shinhan” as an integrated financial group.
Chairman Cho would like to see the group’s Vietnamese operation grow to become a successful model under the Glo-Colorazation Plan,
with the group planning to make its overseas share of total profit to be boosted to around 20 percent next year and Vietnam is counted among the countries to make a big contribution.
The operating profit that the group generated out of its Vietnamese operation came to as much as 124.4 billion won or 26 percent of its total overseas profit last year.
Shinhan Vietnam Bank set up its 32nd branch in the Southeast Asian country on June 13.
An official of the group said the move to expand the operation in Vietnam has been getting stronger among the affiliates of the group.
Shinhan Bank is showing prominence as the top foreign bank in Vietnam, as it continues to expand there.
Shinhan Bank recorded 95 billion won in net profit last year, which is similar to the scale of net profit of Shinhan group's affiliate companies.
It now has 32 branches in Vietnam, the largest number among foreign banks in the Southeast Asian country.
Shinhan plans to open four more by the end of this year, in the provinces of Ninh Binh, Nam Dinh and Thai Binh.
Vice President Ryu Seung-heon of Shinhan Financial Group explains an economic situation in Vietnam to the group of institutional investors and analysts from Korea and other countries at a briefing session held on May 27 in Ho Chi Minh City. (Photo: SFG)