Shinhan Bank's H2 Profit Target: 'Expansion of Loan Assets'

'Management Strategy Meeting' and 'Performance Evaluation Conference' Held on the 16th

[Asia Economy Reporter Kwangho Lee] Shinhan Bank is set to focus on profitability creation based on expanding loan assets in the second half of this year. It will also emphasize credit risk management to prepare for potential non-performing loans related to COVID-19. Furthermore, as digital transformation (DT) is the key survival keyword in this year’s financial market, the bank plans to accelerate its digital innovation efforts.

According to the financial sector on the 15th, Shinhan Bank will hold its second half management strategy meeting and performance evaluation conference online on the 16th of this month. This event, held twice a year in the first and second halves, is a time to review achievements and discuss future tasks.

Since last month, CEO Jin Ok-dong and employees have been extremely busy closing the first half and establishing management strategies for the second half. It is reported that special attention was given to the loan operation strategy for the second half.

Loan Growth Centered on High-Quality Assets... Preparing for Smooth Landing of Maturity Programs

Shinhan Bank expects the growth trend to improve compared to the first half, supported by the spread of COVID-19 vaccinations and global economic recovery, continuing the recovery centered on exports and investments.

Accordingly, considering both internal and external environments comprehensively, the bank plans balanced loan growth in the small and medium-sized enterprises (SMEs), individual business owners, and household sectors under the policy of managing high-quality assets.

While supporting companies affected by COVID-19, the bank is also preparing its own smooth landing programs such as the Corporate Success Program and SME Healing Program to prepare for the expiration of loan maturity extension and interest repayment deferral programs at the end of September.

CEO Jin said, "If interest rates rise in the second half and the economy such as exports improves, profitability improvement can be expected through net interest margin (NIM) improvement and non-interest income. We are also making great efforts in terms of loan loss costs, so there may be some reductions compared to the target."

Along with this, Shinhan Bank plans to accelerate the reduction of existing offline branches and improve them into specialized counters to promote digital transformation. The bank plans to close 58 branches in the second half of this year. Including the closure of six branches in the first half, the total number of branches will be reduced by about 60 this year alone. As a result, the number of branches nationwide owned by Shinhan Bank is expected to decrease from 859 last year to the high 700s.

Accelerating Digital Transformation... Building O2O and Business Linkages

On the 12th, the bank introduced its digital specialized branches called ‘Digilog’ for the first time at Seoul Seosomun Branch, Incheon Namdong Central Financial Center, and PWM Mokdong Center, and plans to launch one at Hanyang University in September. The most noticeable point is that the ‘Shinhan Bank’ logo is not displayed at the branches. This is the first time in the banking sector that only the service brand is indicated without the bank’s name. At the digital specialized branches, customers can check products and information, and the branches operate on a 100% reservation basis to eliminate waiting times. Additionally, AI bank tellers are deployed to conduct remote services through video consultations.

The bank also plans to accelerate the establishment of digital platforms (O2O) and business linkages. The core of the O2O business is not only building a separate food ordering platform but also expanding the core banking business through the creation of innovative financial businesses based on non-financial platforms. Through this, Shinhan Bank intends to discover new businesses (New-Biz) based on non-financial data that the bank could not obtain independently and expand financial areas using non-financial data generated on the platform.

Moreover, the bank will strive to strengthen corporate business based on an enterprise resource planning (ERP) platform to compete against big tech companies. By partnering with ERP provider Douzone Bizon, Shinhan Bank plans to acquire new customers and establish a data-based customer management system to secure a leading position in the SME market and lay the foundation for the future digital financial development of SMEs.

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