Shinhan Bank Issues New Hybrid Capital Securities Worth 290 Billion Won

[Asia Economy Reporter Kwon Haeyoung] Shinhan Bank is issuing KRW 290 billion worth of new Korean won denominated hybrid capital securities. This is to strengthen the bank's capital soundness in accordance with the introduction of Basel III. Amid domestic and international economic uncertainties, demand from investors is pouring into financial bonds, which are 'safe assets' with higher credit ratings compared to other companies, leading the bank's hybrid capital securities issuance scale to exceed the initial plan and continue its success.

According to Shinhan Bank on the 25th, this hybrid capital securities issuance consists of KRW 240 billion of 5-year callable perpetual bonds and KRW 50 billion of 10-year callable perpetual bonds. The interest rates are the lowest for four consecutive years among Korean won hybrid capital securities issued by commercial banks, at 2.88% and 3.08%, respectively.

Shinhan Bank initially planned to issue KRW 250 billion, but despite increased international volatility and unstable market conditions, the issuance amount was increased to KRW 290 billion due to active participation from various investment institutions.

Through this issuance, Shinhan Bank's capital adequacy ratio is expected to rise by 16 basis points. Shinhan Bank explained that the nearly double subscription rate of the offering amount served as an opportunity to firmly establish its excellent financial soundness and status as a leading bank. In particular, hybrid capital securities are recognized as capital rather than debt, which is advantageous for strengthening the bank's financial soundness.

A Shinhan Bank official said, "Even amid increased volatility in the bond market, we were able to attract participation from various institutions such as securities companies, insurance companies, and mutual aid associations through active communication with investors, including offering 10-year callable options to meet long-term investment demand," adding, "We will continue to proactively expand core capital and manage a stable capital adequacy ratio."

This content was produced with the assistance of AI translation services.