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Shinhan seeks to acquire stake in JV with BNP Paribas in split move

Oct 06, 2020 (Gmt+09:00)

Shinhan Financial Group is seeking to acquire a stake held by BNP Paribas in a joint venture in what is widely seen as the South Korean holding company’s move to split with the French asset manager.

According to financial industry sources on Oct. 5, Shinhan Financial is pushing to buy 35% of Shinhan BNP Paribas Asset Management Co. from BNP Paribas to wholly own the company. Shinhan, Korea’s second-largest banking group, already owns 65% of the joint venture.

Source said the move is part of Shinhan Financial Group Chairman Cho Yong-byoung’s initiative to reorganize the group’s asset management-related affiliates.

In recent months, Shinhan Financial has been reaching out to asset management companies well versed in traditional assets such as securities and bonds to bolster its asset management business.

Separately, the group is also known to be transferring its alternative investment portfolio in the Shinhan-BNP joint venture to Shinhan Alternative Investment Management Co.

“Back in the early 2000s, local firms needed foreign partners to learn advanced financial techniques from them. But maybe not any longer,” said a financial industry official.
Shinhan BNP Paribas Asset Management was created in 2002 when the Korean group sold a 50% stake minus one share in Shinhan Investment Trust Management Co. to BNP Paribas. The French strategic partner’s stake in the joint venture, however, dropped considerably after the JV merged with SH Asset Management.

With about 57 trillion won ($49 billion) of assets under management, the joint venture, Shinhan BNP Paribas Asset Management, posted 12.8 billion won in net profit in the first half of 2020.

Cho Yong-byoung, Chairman and CEO of Shinhan Financial Group
FULL SEPARATION UNLIKELY IN NEAR FUTURE

Investment banking industry sources said Shinhan’s separation with BNP Paribas seems inevitable, but a complete split won't likely happen soon because the French company also holds a 3.3% stake in Shinhan Financial.

“BNP Paribas gets stable dividends from Shinhan Financial. It’s unlikely that the French firm will completely withdraw from Shinhan in the near future,” said an investment banking industry official.

Shinhan’s move to sever ties with BNP Paribas comes as some foreign financial companies are seeking to sell their Korean operations.

AXA, a French multinational insurance group, recently hired Samjong KPMG as manager to sell its 100% stake in its Korean operation, AXA General Insurance Co.

Hana Financial Group signed a contract in 2018 to buy a stake in UBS Hana Asset Management Co. from UBS AG to fully own the asset management firm.

Write to Daehun Kim and Sang-eun Lucia Lee at daepun@hankyung.com

Edited by In-Soo Nam



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