[비즈한국] With Shuhyup Bank recently finalizing its acquisition of Trinity Asset Management, rumors of a potential transition into a financial holding company have re-emerged. Shuhyup Bank had previously devised a plan to transition into a financial holding company in 2022. At the time, conditions were unfavorable for such a move, as it lacked financial subsidiaries and suffered from unstable capital adequacy. The situation is different now. Capital adequacy has improved, and the acquisition of Trinity Asset Management has expanded its business scope. However, Shuhyup Bank has officially stated that it has no plans to transition into a financial holding company.
Shuhyup Bank has shown interest in transitioning to a financial holding company in the past. In January 2023, former Shuhyup Bank CEO Kang Shin-sook stated at her inaugural press conference, “We plan to pursue a swift transition to a financial holding company by establishing a close cooperative system with external agencies, including the government.” However, after CEO Kang stepped down last November, the transition plans effectively fizzled out. While Shuhyup Bank previously presented the transition as a mid- to long-term goal, the plan is currently omitted.
Considering Shuhyup Bank's current situation, a transition to a financial holding company is not easy. Currently, the only financial subsidiaries existing as legal entities within the National Federation of Fisheries Cooperatives (Suhyup) are Shuhyup Bank and Trinity Asset Management. Although it also engages in card and insurance-related businesses, these are operated as internal departments rather than separate legal entities. Furthermore, the acquisition of Trinity Asset Management was only recently finalized.
According to the Financial Holding Companies Act, a transition is possible if an entity owns one or more subsidiaries. However, Shuhyup Bank and Trinity Asset Management alone appear insufficient to compete as a financial holding company. Moreover, Trinity Asset Management’s profitability is weak, as evidenced by a deficit last year.
An amendment to the Fisheries Cooperatives Act (Suhyup Act) is also necessary. The Agricultural Cooperatives Act (Nonghyup Act) contains a provision stating, "The National Agricultural Cooperative Federation shall establish a financial holding company by separating its credit and mutual aid businesses." The Suhyup Act lacks such a provision, meaning relevant clauses must be added to establish a financial holding company. This would require the cooperation of the National Assembly.
Nevertheless, talk of Shuhyup Bank’s transition to a financial holding company persists within the financial sector. Transitioning could lead to economies of scale and improved management efficiency. If Shuhyup Bank diversifies its business portfolio through additional mergers and acquisitions (M&A) in the future, it could facilitate a transition.
Some in the financial industry predict that once Shuhyup Bank’s capital adequacy further improves, it will push for additional M&As and a transition to a holding company. Shuhyup Bank’s decision to put the transition plan on hold was also influenced by capital issues. Last October, during a parliamentary audit by the National Assembly’s Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee, Suhyup Federation Chairman Noh Dong-jin said, “We have put the transition on hold while considering various economic events and factors, but we are continuing to review it.” An official from the Ministry of Oceans and Fisheries who attended the audit also noted, “While we agree that a transition is necessary, it is the expert opinion that it should be pursued after the financial situation is sufficiently stabilized.”
Shuhyup Bank’s capital adequacy has improved. According to the Financial Supervisory Service, Shuhyup Bank’s Common Equity Tier 1 (CET1) ratio rose from 11.46% at the end of 2023 to 12.27% at the end of 2024, and further to 12.59% at the end of June 2025. However, this still falls short of the domestic bank average CET1 ratio of 13.57% as of June this year. The CET1 ratio, calculated by dividing common equity capital by risk-weighted assets, is a key indicator of a financial institution's capital soundness and its ability to absorb losses.
Shuhyup Bank stated that it currently has no plans to transition into a financial holding company. A Shuhyup Bank official explained, “We have not established any plans for a transition to a financial holding company,” adding, “Our top priority and focus is on growing our asset management firm.”