Profile: Shinhan Financial Group Co Ltd (SHG)
5 Feb 2016
Shinhan Financial Group Co., Ltd. (SFG), incorporated on September 1, 2001, is a financial holding company. The Company operates through eight segments: retail banking, corporate and investment banking, international banking, other banking services, credit card services, securities brokerage services, life insurance services and other. The Company’s Retail banking segment offers loans to or deposits from individual customers, wealth management customers, and institutions, such as hospitals, airports and schools. The Company’s Corporations and investment banking segment offers loans to or deposits from corporations including small or medium sized companies and business related to investment banking. The Company’s International banking segment offers internal asset and liability management, trading of securities and derivatives, investment portfolio management and other related business supervision on overseas subsidiaries and branch operations and other international business. Its Others segment is engaged in administration of bank operations. The Company’s Credit card segment is engaged in credit card business. Its securities brokerage services segment offers securities trading, underwriting and brokerage services. The Company’s Life insurance segment is engaged in life insurance and related business. Its Others segment is engaged in leasing, assets management and other businesses.
The Company’s deposit products consist of demand deposits, savings deposits, time deposits, certificates of deposit, housing subscription time deposits and housing subscription installment savings deposits. The Company has around 13 direct subsidiaries and 18 indirect subsidiaries offering a range of financial products and services, including commercial banking, corporate banking, private banking, credit card, asset management, brokerage and insurance services. The Company operates through a network of around 76 offices in the United States, Canada, the United Kingdom, Japan, the People’s Republic of China, Germany, India, Hong Kong, Vietnam, Cambodia, Kazakhstan, Singapore, Mexico, Uzbekistan, Myanmar and Poland.
Retail Banking Services
The Company provides retail banking services primarily through Shinhan Bank, and, to a lesser extent, through Jeju Bank, a regional commercial bank. Retail banking services include mortgage and home equity lending and retail lending, as well as demand, savings and fixed deposit-taking, checking account services, electronic banking and automated teller machine (ATM) services, bill paying services, payroll and check-cashing services, currency exchange and wire fund transfer. The Company offers various retail loan products, consisting principally of loans to individuals and households. Its retail loans consist of mortgage and home equity loans, which consist of mortgage loans that are used to finance home purchases and are generally secured by the housing unit being purchased, and other retail loans, which are loans made to customers for any purpose other than mortgage and home equity loans. As of December 31, 2014, Shinhan Bank operated 25 private banking centers nationwide, including 18 in Seoul, three in the suburbs of Seoul and four in cities located in other regions in Korea.
Corporate and Investment Banking Services
The Company provides corporate banking services, primarily through Shinhan Bank, to small- and medium-sized enterprises, including enterprises known as small office, home office (SOHO). It also lends to government-controlled enterprises. Shinhan Bank also engages in treasury and securities investment business, which involves, among other things, treasury activities (consisting primarily of internal asset and liability management), securities investment trading and derivatives trading. Large corporate customers consist primarily of member companies of chaebols and financial institutions. Shinhan Bank provides a range of corporate banking services, including investment banking, including real estate financing, overseas real estate project financing, large development project financing, infrastructure financing, structured financing, equity investments/venture investments, mergers and acquisitions consulting, securitization and derivatives services, including securities and derivative products and foreign exchange trading. Shinhan Bank, through Shinhan Asia Limited, a subsidiary in Hong Kong, also arranges financing for, and offers consulting services to, Korean companies expanding their business overseas, particularly in Asia. The Company’s principal loan products for corporate customers are working capital loans and facilities loans. Working capital loans, which include discounted notes and trade financing, are generally loans used for general working. Shinhan Bank provides to its customers, and to a limited extent, trades for its proprietary accounts, a range of derivatives products, which include interest rate swaps, options, and futures; cross-currency swaps; equity and equity-linked options; foreign currency forwards, swaps and options; commodity forwards, options and swaps; credit derivatives, and Korea Composite Stock Price Index (KOSPI) 200 indexed equity options.
Shinhan Bank engages in treasury and investment activities in international capital markets. It offers foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services and foreign banking operations through its overseas branches and subsidiaries.
Trust Account Management Services
Shinhan Bank’s trust account management services involve management of trust accounts, primarily in the form of money trusts. Shinhan Bank offers variable rate trust products through its retail branch network.
Credit Card Services
The Company provides credit card services principally through its credit card subsidiary, Shinhan Card, and to a limited extent, Jeju Bank. Shinhan Card offers a range of credit card and other services, principally consisting of the following: credit card services, which involve providing cardholders with credit up to a preset limit to purchase products and services; cash advances, which enable the cardholders to withdraw cash subject to a preset limit from an ATM machine or a bank branch, and installment purchases, which provide customers with an option to purchase products and services from select merchants on an installment basis for which, repayments must be made in equal amounts over a fixed term ranging from two months to 24 months; card loans, which enable cardholders to receive, up to a preset limit, a loan, which are generally unsecured. Shinhan Card offers a range of credit card products, which include cards that provide additional benefits, such as frequent flyer miles and reward program points that can be redeemed by the customer for complementary services, prices and cash; platinum cards and other preferred membership cards, which have higher credit limits and provide additional services in return for higher annual membership fees; cards with additional features to preferred customers, such as revolving credit cards, travel services and insurance; cards with fraud detection and security systems to prevent the misuse of credit cards and to encourage the use of credit cards over the Internet; corporate and affinity cards that are issued to employees or members of particular companies or organizations, and mobile phone cards allowing customers to conduct wireless credit card transactions through their mobile phones. Shinhan Card provides installment finance services to customers to facilitate purchases of durable consumer goods, such as new and used cars, appliances, computers and other home electronics products. Shinhan Card also provides auto leasing financing to retail customers and corporations.
Securities Brokerage Services
The Company provides a range of financial investment services to its customer base, including corporations, institutional investors, governments and individuals, through Shinhan Investment. Financial investment services offered by Shinhan Investment range from securities brokerage services, investment advice and financial planning services, and investment banking services, such as underwriting and mergers and acquisition advisory services. Shinhan Investment also engages in equity- and stock index-linked derivatives sales and brokerage, proprietary trading and brokerage services for futures involving interest rates, currency and commodities, as well as foreign exchange margin trading. Shinhan Investment provides services, including retail client services, institutional client services and investment banking services. Its retail client services include equity and bond brokerage, investment advisory and financial planning services to retail customers, with a focus on high net worth individuals. It offers institutional client services, including brokerage of stocks, corporate bonds, futures and options to Shinhan Investment’s institutional and international customers and sale of institutional financial products. The Company’s investment banking services include a range of investment banking services to Shinhan Investment’s corporate customers, such as domestic and international initial public offerings, mergers and acquisitions advisory services, bond issuances, underwriting, capital increase, asset-backed securitizations, issuance of convertible bonds and bonds with warrants, structured financing, issuance of asset-backed commercial papers and project financings involving infrastructure, real estate and shipbuilding. Shinhan Investment also engages, to a limited extent, in proprietary trading in equity and debt securities, derivative products and over-the-counter market products.
Life Insurance Services
The Company provides life insurance products and services primarily through Shinhan Life Insurance. Shinhan Life Insurance provides its services through diversified distribution channels consisting of financial planners, telemarketers, agency marketers and bancassurance specialists.
The Company through its other subsidiaries provides asset management, leasing and equipment financing, regional banking, savings banking, loan collection and credit reporting, collective investment administration and financial system development services. Through Shinhan Private Equity (in addition to Shinhan Investment), the Company is also engaged in private equity investments through formation of private equity funds by soliciting investors on a private placement basis. The Company also provides asset management services through Shinhan BNP Paribas Asset Management. The Company provides leasing and equipment financing services to its corporate customers mainly through Shinhan Capital. Shinhan Capital provides customers with leasing, installment financing and new technology financing, equipment leasing, and corporate credit financing. It provides focused commercial banking services, primarily in Jeju Island of Korea, through a majority owned banking subsidiary, Jeju Bank. Jeju Bank provides retail banking, corporate banking, and treasury and trust account management services through a network of around 38 branches, as of December 31, 2014.
The Company provides savings banking services. Shinhan Savings Bank offers savings and other deposit products primarily to small- to medium-sized enterprises and low income households. The Company centralizes credit collection and credit reporting operations for its subsidiaries through Shinhan Credit Information Co. Ltd., which also provides similar services to third party customers. Shinhan Credit Information’s services include debt collection, credit inquiries, credit reporting, civil application/petition services and process agent services, among others. It provides integrated collective investment administration services through Shinhan AITAS Co., Ltd. (Shinhan AITAS). Shinhan AITAS provides general management service, asset management systems, accounting systems and trading systems to asset management companies and institutional investors. The Company through Shinhan Private Equity is also engaged in private equity investments through formation of private equity funds. It provides financial system development services through Shinhan Data Systems, which offers system integration, system management, IT outsourcing, business process outsourcing and IT consulting services.
The Company competes with Korea Development Bank, the Industrial Bank of Korea, the National Association of Agriculture and Fisheries, Citibank Korea Inc. and Standard Chartered Bank Korea Limited.
Shinhan Financial Group Co Ltd
16, Daegyeong Bldg
120, Taepyeongno 2-Ga, Jung-Gu
20, Sejong-daero 9-gil, Jung-gu