Shinhan, Hana team up for globalization
Shinhan and Hana financial groups formed an unprecedented partnership to enhance their competitiveness in the global market, the two banking groups said Monday.
According to the financial services holding firms, Shinhan Chairman Cho Yong-byoung and Hana Chairman Kim Jung-tai signed a memorandum of understanding (MOU) regarding their cooperation at Lotte Hotel in downtown Seoul.
“This agreement will show the new paradigm of the financial industry, not just allow us to overcome our rivalry and establish a cooperative relationship,” Cho said. “We hope this becomes a great opportunity for both groups to enhance their competitiveness and break through the uncertainties in the global market.”
Kim said: “We hope this agreement becomes a cornerstone for both groups to compete with world-class financial institutions.”
This is the first time the nation’s financial holding firms have signed an MOU with each other.
The two groups agreed to cooperate in seeking business opportunities overseas, coping with various regulations, making investments in foreign markets and establishing overseas networks.
They also promised to pursue various other types of cooperation.
They said they expect to rank higher with global financial giants by refraining from competing with each other.
Over the past few years, Korean financial services companies have been in fierce competition overseas.
Shinhan and Hana have also vied to hold the dominant position in China, Vietnam and several other Southeast Asian countries.
As of the end of 2019, Shinhan had 216 outlets in 20 countries, while Hana had 199 in 24 countries.
In particular, Shinhan has focused on the Japanese and Vietnamese markets, while Hana has bet big on China and Indonesia.
During an interview with The Korea Times late last year, the Shinhan chairman differentiated his company from its rivals, saying Shinhan has a global business division to localize channels and employees, as well as customers and their assets.
“We have already followed differentiated strategies, such as reinforcing the non-banking sector, enhancing competitiveness in the capital market and boosting our global business,” he said at that time.
The Hana chairman said in another Korea Times interview that his company’s overseas expansion will not rely only on Southeast Asian nations.
“International banking and capital markets in advanced countries are key areas, a source of greater profit. What we learn there will translate into higher performance,” he said at that time.
The two groups, however, agreed that they should avoid excessive competition and pursue innovation through mutual cooperation, so as to overcome their reliance on certain areas and their relatively smaller sizes compared to world’s leading financial firms.
Against this backdrop, market observers are wondering whether Shinhan and Hana will lead the innovation and development of the country’s financial industry.