Shinhan to build landmark office tower for non-banking units

Shinhan Financial Group Co., South Korea's second-largest financial group, plans to build a new high-rise office tower in Seoul’s central business district to house all its non-banking units, as it gears up for another leap as a leading financial group in Asia.

According to sources in the Korean financial sector, officials in Jung-gu, one of Seoul’s 25 districts, are reviewing Shinhan Financial Group's plan to redevelop one of its main office buildings on Euljiro 2-ga.

The building originally served as the head office of the now-defunct Chohung Bank, which was acquired and merged by Shinhan Bank in 2006. It is now occupied by Shinhan Financial’s non-banking units: Shinhan Securities Co., Shinhan Capital Co., Shinhan Savings Bank Co., Shinhan DS Co. and Shinhan Credit Information Inc.

The redevelopment plan calls for demolishing the old building to build a 172-meter, 40-story skyscraper, which will be taller than the 117-meter headquarters building of Shinhan’s larger crosstown rival, KB Financial Group Inc. in Yeouido.

In 2023, Shinhan Financial earned 4.36 trillion won ($3.2 billion) in net profit, falling short of KB Financial’s 4.63 trillion won, according to their regulatory filings. They are Korea’s top two banking groups.

Once it is built, Shinhan’s new building will tower over neighboring Mirae Asset Center 1, the area’s landmark office complex rented to Korea’s No. 1 securities company, Mirae Asset Securities Co., and the Seoul offices of various foreign firms such as McKinsey & Company, Boston Consulting Group, Bloomberg and KKR.

FOR BETTER SYNERGY AMONG NON-BANKING UNITS

Shinhan’s new tower is expected to house Shinhan’s non-banking units to create greater synergy, especially in the wealth management, retail banking and corporate banking sectors.

Jin Ok-dong, Shinhan Financial Group chairman, has been calling for close collaboration among affiliates since taking the helm in March 2023.

In December, Shinhan Financial launched a super app called Shinhan Super SOL, where its users can access all of Shinhan’s banking, credit card, stock and insurance services in a single app.

The app was the outcome of Shinhan’s accelerated digital collaboration among affiliates.  

With all non-banking units under one roof, Korea’s No. 2 financial group is expected to enhance the competitiveness of those units.

Shinhan Financial earned 1.65 trillion won in net profit from non-banking businesses in 2023, down 15.7% from the prior year.

Its net profit from non-banking operations accounted for 35% of its total profit, the largest among the country’s top four financial groups — Shinhan, KB, Hana Financial Group Inc. and Woori Financial Group Inc.

Its presence in the non-life insurance sector, however, is still weak and needs improvement.

Shinhan offers financial services ranging from banking to life insurance, securities, credit cards, and asset management.

Before it acquired BNP Paribas Cardif General Insurance, which later became Shinhan EZ Insurance, for 40 billion won in 2021, it was absent from Korea’s non-life insurance market.

Shinhan Financial has no plan to move the group’s headquarters building on Taepyeong-ro or its flagship banking unit, Shinhan Bank's head office. Shinhan Securities’ main office will also stay in Yeouido for now.

Construction of the new landmark office building in Jung-gu is expected to be completed by 2031.

Write to Bo-Hyung Kim and Jin-Woo Park at kph21c@hankyung.com
Sookyung Seo edited this article.