Shinhan Bank CEO Jin Ok-dong

Korean lenders opt not to acquire Cambodian financial outfit

Shinhan Bank is Korea’s largest lender by net profit. When its new CEO Jin Ok-dong took charge of the Seoul-based entity early this year, he promised to remain ahead of the curve.

Toward that end, the 57-year-old stressed two strategies of digital innovation and global expansion at a time when the domestic market hits the saturation mark.

Specifically, Jin picked three crucial markets of Vietnam, Myanmar, and Cambodia. Vietnam is already the bank’s cash cow as it netted $72 million in profit there last year.

To duplicate the success in Cambodia, Shinhan tried to acquire Prasac, the largest financial institution in the country.

Under Jin’s stewardship, Shinhan vied to acquire a 90 percent stake in Prasac, whose total asset amounted to $1.75 billion as of the end of 2017.

And there came its nemesis KB Kookmin Bank, which competes with Shinhan for the market leadership in Korea – KB also hoped to take over the Cambodian financial outfit.

The two-way rivalry prompted Prasac shareholders to raise the price tag of the company to almost $900 million, four times its capital of $229 million, according to observers.

The soaring price appears to prod Shinhan to give up. Kookmin also seems to come up with the same decision.

This is not the first time for a Korean bank to bid for Prasac. In 2016, Woori Bank was selected as a preferred bidder for it, but the deal eventually fell apart because Woori failed to agree with its shareholders.

Shinhan and its head Jin might make the right decision of not overpaying to gobble up Prasac.

After avoiding the winner’s curse, now the question for them is how to strengthen its footing in Southeastern Asian countries. It remains to be seen how Jin will be able to abide by his promise in the fast-growing markets.


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