Korea

Awards of Excellence
Asian regional awards

Shinhan Bank is Korea’s best banking group and expanded last year with the acquisition of Chohung Bank, Korea’s oldest lender. With a cautious approach to integrating the two banks, management of parent Shinhan Financial Group have succeeded in avoiding many of the labour relations pitfalls of its competitors. Staff numbers have been reduced nonetheless from more than 16,000 to about 11,000. The combined bank’s branch network has been consolidated to a little more than 1,000 branches nationwide, serving more than 15,000 customers. The integration, although successful, has come at some cost to the combined financial numbers. Net income increased on a combined basis to W1.66 trillion ($1.8 billion) but return on equity fell to a still respectable 18.6%. More worryingly, the combined group’s cost to income ratio jumped to 52.1% as at the end of December 2006. Shinhan has proved its ability to manage costs in the past, however, and it is likely that further cost efficiencies will bring this ratio down over time to a more normalized mid-40s.