Reappointment of Chairman Confirmed at General Meeting
Leading with Digital and Customer First
Speeding Toward First-Class Shinhan
[Asia Economy Reporter Kwon Haeyoung] The second term of the Shinyoung Cho-led Shinhan Financial Group has commenced. Since his inauguration, Chairman Cho has strengthened Shinhan Financial Group's capabilities through non-bank and global mergers and acquisitions (M&A). In his second term, he plans to elevate Shinhan Financial Group's competitiveness further with the goal of becoming a 'First-Class Shinhan.' The focus will be on 'Digital Shinhan' and 'Customer First.'
Shinhan Financial Group held its regular shareholders' meeting on the 26th and confirmed Chairman Cho's reappointment. Despite opposition from global proxy advisory firms and the National Pension Service ahead of the meeting, the reappointment agenda for Chairman Cho passed smoothly.
At the shareholders' meeting, Chairman Cho emphasized, "This meaningful year marks the start of a new journey. We will complete the 2020 Smart Project and vigorously challenge ourselves through First-Class Shinhan," adding, "We will devote all our efforts to earn trust befitting a First-Class Shinhan from customers and society."
The main tasks for the second term of the Cho-led administration, standing at a new starting point, are expected to be the leap toward First-Class Shinhan mentioned by Chairman Cho and crisis management amid worsening internal and external conditions.
Chairman Cho Yong-byeong of Shinhan Financial Group speaking at the '2020 Shinhan Management Forum.' Photo by Yonhap News
On the same day, Chairman Cho stated, "Regarding losses from investment products, we will engage in self-reflection and carefully examine the situation from the customer's perspective. Under the unchanging principle of 'Customer First,' we will repay all customers with the highest value and the best experience," pledging, "We will transcend business boundaries to become a First-Class Shinhan leading Korean finance, creating digital businesses and improving management efficiency."
He also firmly committed to overcoming the crisis amid the rapid economic slowdown domestically and internationally due to the spread of the novel coronavirus (COVID-19). Chairman Cho said, "The current economic and financial crisis does not seem to end in the short term," adding, "We will take a leading role in the financial sector to overcome the national financial crisis and proactively provide Shinhan's innovative finance to help small and medium-sized enterprises, startups, and others overcome the current difficulties."
As the global economy rapidly cools due to COVID-19, financial companies face difficult situations. Although the profit-generating capacity of financial companies is declining due to interest rate cuts and concerns over deteriorating soundness, they are simultaneously required to act as a fire extinguisher for companies and households experiencing liquidity shortages and to manage soundness to prevent risk transmission within the financial sector. Chairman Cho, who worked as the New York branch manager during the 2008 global financial crisis and handled key tasks such as fundraising, is also noted for his crisis management capabilities.
Chairman Cho's successful reappointment is evaluated as a result of his characteristic 'steady management.' Since his inauguration in 2017, he has steadily carried out various M&As, significantly strengthening Shinhan Financial Group's non-bank sector and increasing the proportion of global business. Just one year after his inauguration, in September 2018, he acquired Orange Life (formerly ING Life), awakening Shinhan Financial Group's dormant M&A spirit after a decade without any M&A activity. One month after acquiring Orange Life, in October, he acquired Asia Trust, continuously expanding the non-bank sector. Overseas M&As were also actively pursued, including the retail division of the Australian ANZ Bank in Vietnam, Vietnam Prudential Consumer Finance Company (PVFC), and Indonesia Archipelago Asset Management.
After KB Financial Group took the leading financial position in 2017 based on the acquisitions of LIG Insurance and Hyundai Securities, Shinhan Financial Group reclaimed the top title within a year through aggressive management strategies and has maintained the position for two consecutive years.
In fact, Shinhan Financial Group's performance has grown significantly in both scale and substance since Chairman Cho's inauguration. The group's net income increased from 2.775 trillion won in 2016, before Chairman Cho's tenure, to 2.919 trillion won in 2017. It then reached the 3 trillion won mark for the first time in 2018 with 3.157 trillion won and further increased to 3.403 trillion won last year. Net profits from the global sector also expanded sharply from 159.2 billion won in 2016 to 204.9 billion won in 2017, 322.8 billion won in 2018, and 397.9 billion won in 2019. The share of global sector profits in total net income doubled from 5.7% in 2016 to 11.6% in 2019.
Chairman Cho is known not only for drawing the big picture but also for meticulously managing the detailed operations of affiliates. A financial regulatory official said, "Chairman Cho personally made several requests regarding the change in the fund valuation time of Shinhan iTAS, one of Shinhan's affiliates," adding, "I was quite surprised that the holding company chairman directly managed even the detailed issues of small affiliates."
A financial sector official said, "Compared to other financial holding companies, Chairman Cho has increased the proportion of non-bank and overseas profits in Shinhan Financial Group, significantly leveling up the group's substance," adding, "The financial sector is paying close attention to Chairman Cho's management moves aiming for First-Class Shinhan in the second term."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
