Today, BNP Paribas acquired a 5.6% stake in Shinhan Financial Group from the Korean government, a move which increases its equity interest in the Group to 9.4%.
Before this acquisition, BNP Paribas held 3.8% of Shinhan Financial Group’s share capital, most of which had been acquired since 2001 when the Korean Group was created and listed on the stock exchange.
Shinhan Financial Group is one of the three largest Korean financial groups. It is developing a model that combines a powerful banking network (980 branches) with specialized financial corporations (brokerage, asset management, insurance, leasing and consumer credit). The Group employs 15,000 people and has over 20 million customers. Its 2005 net income grew sharply (+65%) to 1.45 billion euros. Its return on equity is 21%..
Shinhan Financial Group and BNP Paribas have engaged in cooperation in South Korea; in this regard, they own two joint subsidiaries in the asset management and insurance sectors which distribute their products within the Shinhan network and are growing sharply.
This financial investment of approximately EUR 800 million was carried out under market conditions. This price represents a multiple of approximately 10 times 2006 net income and 1.9 times book value according to analysts‘ estimates. It does not impact BNP Paribas Group’s base shareholders’ equity, only has a negligible effect on its Tier 1 ratio, and will help strengthen the existing partnership between the two groups.
About BNP Paribas
BNP Paribas (www.bnpparibas.com) is a European leader in banking and financial services, with a significant and growing presence in the United States and leading positions in Asia. The group has one of the largest international banking networks, a presence in over 85 countries and employs more than 110,000 employees, including approximately 80,000 in Europe. BNP Paribas enjoys key positions in its three core businesses: Corporate and Investment Banking, Asset Management & Services and Retail Banking.