Where Are the Global Business Stars... Shinhan in Japan and Vietnam, KB in Cambodia

As major commercial banks competitively attempt overseas expansion, Shinhan Bank's subsidiaries in Vietnam, Japan, and Kazakhstan, as well as KB Kookmin Bank's Cambodian subsidiary, have emerged as key profit drivers.

According to the financial sector on the 21st, Shinhan Bank's 10 overseas subsidiaries recorded a cumulative net income of 434.31 billion KRW for the first three quarters. This represents an increase of about 24.0% compared to the same period last year (350.228 billion KRW).

The significant increase in net income was largely influenced by these key overseas subsidiaries. Shinhan Vietnam Bank and Japan's SBJ Bank are representative examples. Shinhan Vietnam Bank posted a net income of 207.067 billion KRW, up 12.4%, while Japan's SBJ Bank recorded a net income of 106.93 billion KRW, up 16.0%. These two subsidiaries constitute the two main pillars of Shinhan's global business, accounting for 72.4% of the total global net income. Shinhan Vietnam Bank has shown steady growth, ranking first among foreign banks locally.

The exterior view of Shinhan Financial Group's new Vietnam headquarters located in Thu Thiem, Ho Chi Minh City, Vietnam, which was occupied last August. Over 1,200 employees from the group's banks, cards, securities, life insurance, and DS divisions are working there. Provided by Shinhan Financial Group

Additionally, the Kazakhstan subsidiary marked third place with a 68.7% increase in net income to 75.373 billion KRW. Other subsidiaries such as Shinhan Cambodia Bank (40.8%) and Shinhan Europe Bank (19.6%) also maintained strong growth.

KB Kookmin Bank, during the same period, recorded a net loss of 78.8 billion KRW based on controlling interest. This was due to multiple overseas subsidiaries posting losses or experiencing deteriorating profits. For example, KB Microfinance Myanmar turned to a loss, and Kookmin Bank's China subsidiary saw its net income decline by about 32.7% to approximately 16.895 billion KRW.

Within KB Kookmin Bank, KB Prasac Bank (Cambodia) has been a key profit contributor. Prasac Bank, considered one of the top four banks locally, saw its net income decrease by about 25.4% compared to the previous year but still posted 87.511 billion KRW in net income, significantly reducing the overall loss. Last year’s third quarter, Prasac Bank recorded a net income of 81.298 billion KRW and contributed to the global net income growth with a cumulative net income of 117.321 billion KRW.

However, KB Bukopin Bank (Indonesia) remains a 'pain point' in KB Kookmin Bank's global business. Despite investing trillions of KRW so far, losses continue. In the third quarter of last year, it posted a cumulative net loss of 63.773 billion KRW, which expanded to 186.116 billion KRW in net loss in this year's third quarter. Bukopin Bank has thus emerged as a limiting factor for KB Kookmin Bank's overall global business.

A financial sector official commented, "Although KB Kookmin Bank's entry into Indonesia has not yet yielded immediate benefits, the fact that they challenged a region with different systems and practices for new market development is commendable," adding, "It should be viewed with a longer-term perspective."

Meanwhile, Hana Bank posted a net income of 120.385 billion KRW, up 6.7%. Although several overseas subsidiaries experienced declining performance, the China subsidiary increased by 112% to 10.376 billion KRW, and the Russia subsidiary also rose by 80.4% to 27.913 billion KRW, offsetting the declines. Woori Bank recorded a net income of 154.589 billion KRW, down 32%. The Russia subsidiary posted a 184% increase in net income to 23.08 billion KRW, while Indonesia's Woori Sodara Bank (-23%) and Vietnam Woori Bank (-29%) showed relatively moderate decreases.