[Issuance-Based Note Initiative]④Shinhan: "Zero Real Estate Investment... Will Launch Products Targeting Millennials & Gen Z"

Interview with Shin Jonghyuk, Head of Strategic Planning at Shinhan Investment Corp.
First "Shinhan Premier Issuance Note" Product to Launch Next Month
"We Will Not Engage in Excessive Competition... Confident in Special Promotional Interest Rates"

"As a latecomer to the issuance note market, we have decided to set real estate investment, which has already revealed its shortcomings, at zero. We will introduce issuance note products that grow together with customers, such as installment-based special promotional products targeting the Millennials & Gen Z demographic."

Shin Jonghyuk, Head of Strategic Planning at Shinhan Investment Corp., who leads the company’s issuance note business, stated in a recent interview with The Asia Business Daily, "We will launch our first issuance note product next month and also introduce special promotional products for the Millennials & Gen Z demographic."

Having received approval for issuance notes from financial authorities at the end of last year, Shinhan Investment Corp. plans to operate products for individual customers under the brand name 'Shinhan Premier Issuance Note,' leveraging Shinhan Financial Group’s wealth management brand. Notably, as a latecomer, the company is focusing on venture capital but prioritizing a stable and conservative management strategy.

Shin Jonghyuk, Head of Strategic Planning at Shinhan Investment Corp., is being interviewed at the Yeouido headquarters on the afternoon of the 15th. Shinhan Investment Corp.

Shin stated, "We will start with a scale of 700 billion won in the first year and aim to expand to the mid-2 trillion won range within three years," adding, "We will not engage in excessive competition or pursue short-term gains." This approach is far more conservative compared to competitors that received issuance note approval from financial authorities around the same time. In the case of issuance notes, up to twice the company’s equity capital can be raised, and as of the third quarter of last year, Shinhan Investment Corp.’s equity capital was about 5.6 trillion won. Existing players such as Korea Investment & Securities and KB Securities have pursued aggressive strategies at about 1.5 times their equity capital.

The first issuance note product to be launched by Shinhan Investment Corp. next month will consist of a 50:50 ratio of demand and term products, and will also include special promotional products. Shin explained, "The first product is symbolic of us entering the issuance note market," and added, "In terms of type and structure, it may be very similar to other companies' issuance note products." However, he emphasized, "We are confident in the interest rate competition for special promotional products," and stated, "Compared to other companies’ first products, which offered rates in the mid-3% range, our (interest rate) level will be attractive."

Setting the main target customers of issuance notes as the Millennials & Gen Z demographic is another point of differentiation from competitors. Shin said, "As a first-year issuance note provider, our marketing perspective is to join hands and grow together with young professionals and the Millennials & Gen Z demographic," and added, "With follow-up products such as installment-based products for the Millennials & Gen Z demographic, we will ensure that customers find them attractive."

Excluding real estate from the investment asset group for the raised funds is also noteworthy. Shin explained, "The shortcomings of real estate-focused issuance note businesses by existing securities firms have already been revealed. Wasn’t there a need for reflection on this?" He continued, "Instead of real estate, we plan to provide venture capital in areas such as small and mid-sized enterprises, venture companies, and new technology investment associations."

Alongside this, the company plans to focus on liquidity management and thoroughly manage maturity mismatches between short-term funding and mid- to long-term operations to ensure customer redemption stability. Currently, Shinhan Investment Corp. has set its internal standard for the short-term finance business liquidity ratio at 115%, exceeding the 100% required by the Financial Supervisory Service. Shin said, "A high liquidity ratio means we can always redeem to customers and minimize volatility." Separately, the company will also maintain the proportion of liquid assets in the total funded assets at the mid-50% range and has proactively set a limit for the 'future point liquidity ratio' for the next three years. He stated, "Ultimately, our goal is to minimize the volatility of the liquidity ratio."

Shin dismissed concerns both inside and outside the industry that competition in the issuance note market could intensify as many new players enter, stating, "We will not approach this as a competition." He continued, "Venture capital can be risky capital, and taking an aggressive approach does not align with our business philosophy. We will not rush." This is also why the Strategic Planning Division, rather than the Sales Division, is leading the initial issuance note business.

However, despite the somewhat conservative management strategy, he also emphasized his commitment to venture capital. Thirty-five percent of the funds raised through issuance notes will be invested in venture capital. This far exceeds the mandatory limits set by financial authorities: 10% in 2026, 20% in 2027, and 25% in 2028. He said, "You should not rush into venture capital. You need to build up capabilities one by one to go the distance," and reiterated the plan to utilize Shinhan Financial Group's platform and network to play a priming role in the government’s drive for productive finance.