Shinhan Financial Group (A)
1 . Why performed SFG want to buy Chohung? Was this element of a reasonable strategy, in light with the state in the two banking companies and the Korean language banking sector? For example , having received quick visible staff resistance, whenever they have gone frontward?
Pursuing the Asian financial disaster in the late 1990's, the Southern region Korean financial industry started to be less fragmented as businesses frequently engaged in M& A. The number of business banks in South Korea dropped 35% after the economic crisis and the industry left SHB (Shinhan Traditional bank, Shinhan Economic Group's identity prior to obtaining Chohung Bank) to possibly compete with the industry's leader--which held a lot more than 30% industry share--or with peers, which in turn SHB's management did not need to do. Chohung Financial institution was fixer-upper from insolvency during the economic crisis but as a result of CHB's 100-year longevity at that time, it kept prime retail locations inside Seoul. Additionally, it had a respectable brand in spite of its poor leadership and abysmal financials up to the year 2003. In Chohung, Shinhan Financial institution sought to concentrate the market further and spurn an oligopoly inside the sector with itself among the few prominent firms.
Because the two entities served diverse markets, this represented a possibility for SFG to expand its reach and profile of products. Even more, the two banking companies had been working with the same primary technology and CHB's retail places would allow SFG to possess among the country's greatest distribution networks. Although CHB had a fragile financial position also because the Korean language government had a majority share in CHB, SFG will be required to assist the Korean government not only as a regulating body although also while the majority shareholder of the smaller sized firm, SFG's strategy still represented a prime opportunity to shift itself inside the industry.
In protest with the deal, a few, 500 CHB union users shaved their heads, leaving piles of hair before SFG's head office. Workers...
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[ 1 ]. " Historic Exchange RatesвЂќ