Korea's best domestic bank 2018: Shinhan Bank
For Korea’s commercial banking sector, 2018 was an annus horribilis; many of the biggest lenders were assailed by recruitment scandals that claimed several chief executives, while underlying business was squeezed by a bunch of impressively disruptive digital upstarts.
Shinhan Bank is not above the fray here – like most of its peers, it is under investigation for alleged irregularities about hiring the children of powerful public officials and Shinhan group executives. But look beyond the sensationalist headlines and Shinhan, whosepresident and chief executive is Wi Sung-ho, has had yet another quietly impressive year.
It is the biggest first-tier lender by market capitalization and boasts a lower non-performing loan ratio than any of its peers. Net profit at the parent company, Shinhan Financial Group, rose 3.8% to $749 million in the third quarter of 2018 from a year ago, achieving a record high that puts it ahead of Hana Financial Group ($569 million) and Woori Financial Group ($536 million).
It is also one of the country’s most outward-looking lenders. Over the last two years, on the watch of president and chief executive Wi Sung-ho, it has bought two banks in Indonesia and opened branches in Sydney and Yangon. In December 2017, it finalized the acquisition of ANZ’s Vietnamese retail arm, transforming it at a stroke into the largest foreign bank in the southeast Asian country by assets ($3.3 billion), customers (900,000) and branches (30).
Shinhan’s global network now encompasses 162 branches scattered across 20 countries, including China, Japan, the Philippines, Australia and Cambodia.
But the expansion and its lending growth are not recklessly aggressive: outstanding loans rose 5.9% in 2017 from the previous year, and by 2% year-on-year through the first six months of 2018. Deposits increased 5% over the same period, in line with the country’s low-ish rate of economic growth.
The bank reported a net profit of W1.92 trillion ($1.7 billion) through the first nine months of 2018, an annualized increase of 13%.
Shinhan has also impressed with its efforts to compete with upstart digital lenders. In November 2018, it launched a new, stripped-down-and-simplified mobile banking application, SOL, and it continues to grow and invest in its fintech startup accelerator programmes in Korea and Vietnam.