Fitch affirms Shinhan Bank

Fitch Ratings said it affirmed Shinhan Bank's A- foreign-currency issuer default rating, C individual rating, 1 support rating and F2 short-term rating following the merger of the bank with Chohung Bank on April 1 under the Shinhan name. Shinhan Bank's lower tier 2 and upper tier 2 issue ratings were also affirmed at BBB+ and its hybrid tier 1 rating is affirmed at BBB.

Both Shinhan and Chohung posted robust operating performances in 2005, the agency said. Shinhan reported 774 billion Korea won in net income, Chohung registered 757 billion Korean won in net income and Chohung's non-performing loan ratio declined to 1.0% from 1.9% in 2005.

Fitch said it expects the merger will be successful with the enlarged bank enjoying good profitability as supported by Shinhan's credit risk management capabilities and Chohung's wider presence in the mass market.

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