Shinhan Financial Group, Korea's second-largest banking company, wants to bulk up in the United States through acquisitions, but it is not necessarily targeting Korean-American banks.
Its New York subsidiary, Shinhan Bank America, already has made a deal for a mainstream bank near Atlanta, and Jeffrey J. Lee, the $619 million-asset unit's president and chief executive officer, said it is scouting for others. Among the markets it has identified for its expansion efforts are Chicago, Texas, the District of Columbia, and the Pacific Northwest.
"There are a lot of Korean brand names in the manufacturing" sector, Mr. Lee said. "But there is no [Korean] household name in America as far as financial institutions are concerned. We are trying to … be the first one."
The $220 billion-asset Shinhan Financial acquired Chohung Bank from the South Korean government in 2003. Chohung operated as an independent subsidiary until it merged last year with Shinhan Bank America.
Chohung had been in the United States since 1990, and its American subsidiary, CHB America Bank, also merged with Shinhan Bank America last year.
Last month Shinhan Bank took its first step toward its goal of establishing a nationwide network of branches serving both Korean-American and mainstream customers when it said it would buy the $139 million-asset North Atlanta National Bank in Alpharetta, Ga., for $29 million in cash.
The deal, expected to close next quarter, would add a single branch to Shinhan's seven-branch network in New York, New Jersey, and California.
Shinhan plans to retain most of North Atlanta's management team. The bank would continue to operate as a small-business lender, Mr. Lee said.
He offered HSBC Bank USA, a subsidiary of HSBC Holdings PLC in London, and Union Bank of California, which is mostly owned by Mitsubishi UFJ Financial Group Inc. in Tokyo, as models for the kind of U.S. operation he is trying to build.
Both banks have Asian roots — HSBC used to be Hong Kong and Shanghai Banking Corp. Ltd. — but have established themselves in the U.S. mainstream market.
Shinhan Bank America aims to further penetrate the mainstream market through acquisitions in areas it has identified as having growing economies and increasing Asian-American populations. Mr. Lee said his bank wants to be a "completely localized bank that people recognize as an American bank, rather than a foreign bank."
But Brett Rabatin, an analyst at First Horizon National Corp.'s FTN Midwest Securities Corp. in Nashville, said that if Shinhan were to retain its name, it would face an uphill battle to win over mainstream U.S. consumers.
"If you saw Shinhan Bank, … you would think it was Korean and probably wouldn't go in there, unless you had a relationship with a lender," Mr. Rabatin said. Shinhan "may get some good mainstream business lending-wise, but I would assume, from a deposit and retail side, it would be mostly Korean."
Still, he said that the company could overcome such obstacles if it has enough capital.
Shinhan Bank is "a large institution, so they can certainly do it," Mr. Rabatin said. "It's just a matter of how much money they are willing to spend."
Mr. Lee would not say exactly how much money Shinhan Bank would devote to the expansion initiative.
