Managing risk becomes top priority for ShinhanShinhan Bank plans to focus on risk management this year as Europe’s debt crisis and mounting household debts are feared to dampen economic growth at home and abroad, Korea’s No. 3 lender said yesterday.
Suh Jin-won, the bank’s president, said it has lowered its target growth rate for this year from 2011 due to a perceived slowdown in global economic recovery.
“We expanded around 7 percent last year but we are aiming for around 4 percent growth this year,” Suh said in an interview with Yonhap News Agency. “We will focus on stability rather than growth to reinforce risk management.”
Heightened competition with larger rivals like Kookmin Bank, Woori Bank and No. 4 lender Hana Bank, which is set to take over Korea Exchange Bank, is forecast to squeeze Shinhan’s net interest margin, a key gauge of profitability, Suh added.
Shinhan Bank, the flagship unit of Shinhan Financial Group, is among a string of lenders in the country that are pursuing conservative management strategies this year. With Europe’s sovereign debt crisis feared to hurt export-driven countries like Korea and dampen growth of household and corporate income, domestic banks are girding themselves for one of the most challenging periods since 2008.
While Shinhan plans to rein in expanding household credit and mortgage loans, it will continue to prop up asset management services for high-income earners while seeking potential takeover targets in Southeast Asia, the president said.
“We will complete an Asia financial belt,” Suh said.
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