New chairman pledges to regain market confidence after management feudShinhan Financial Group Co. is seeking acquisitions of Asian lenders to increase its presence in the region as domestic growth opportunities stall, its new chairman said Monday.
“We’re looking at various ways to enter Asian markets, including M&A,” Han Dong-woo, chairman and chief executive officer, told reporters. The company aims to join markets such as Indonesia and Malaysia and bolster its presence in places like Vietnam using existing networks, the chairman said, without providing potential targets or costs.
He said its card unit is poised to enter the Vietnam card markets.
He said profits generated by its overseas units accounted for a mere 3 percent of total earnings.
Shinhan Financial Group chairman Han Dong-woo addresses a news conference Monday. (Yonhap News)
“(The group) needs to raise the portion to more than 10 percent as early as possible,” Han said, without elaborating on a specific timetable.
Han, 62, took office for a three-year term on March 23, replacing Ryoo Shee-yul, who had served as an acting chief of the group since October.
Regarding the group’s interest in taking over savings banks, Han said the group would consider purchasing ailing savings banks that may be put up for sale.
“If savings banks’ troubles continue, they would have a negative impact on the local financial industry. If proper ailing players are up for sale, the group plans to conduct due diligence and take an aggressive stance.”
The financial regulator has halted operations of eight embattled savings banks since January due to weak capital position and liquidity crunches sparked by deposit withdrawal.
Han pledged to rebuild confidence in the firm from clients and shareholders. Shinhan Financial’s image has been marred by high-profile internal strife, sparked by a power struggle among three of the group’s former senior officials including former chairman Ra Eung-chan.
The management feud severely dented the group’s well-established image as one of the country’s leading banking groups.
In his inaugural speech on March 23, Han apologized to customers, shareholders and the public, saying the company breached trust.
The new chairman pledged to introduce a governance structure that includes ensuring succession processes are transparent.
He reiterated the apology and said he will make the system ready within 100 days of assuming the post.
Shinhan Financial posted a net profit of 2.38 trillion won ($2.14 billion) in 2010, up 83 percent from the previous year.
Han joined Shinhan Bank in 1982 after studying law at Seoul National University. He retired as vice chairman of the life insurance unit in 2009, according to Shinhan Financial.
(From news reports)