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Korea

BEST BANK
Shinhan Bank

BEST EQUITY HOUSE
UBS

BEST DEBT HOUSE
JPMorgan

BEST M&A HOUSE
Morgan Stanley

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With the domestic banking market in Korea being shaken up by increasing foreign interest, many of the local banks are struggling to compete effectively. Shinhan Bank is not one of them and wins the best bank in Korea award by dint of its very strong financial performance and sound management.

Shinhan's 2004 financial results reported a net interest margin of 2.26%, return on average assets of 1.18% and a cost-to-income ratio of 38.94%, all of which compare very favourably with domestic competition. Those results produced a return on average equity of 22.1%, one of the highest returns of any Korean bank.

The bank's first-quarter results in 2005 demonstrate where the challenges lie for Shinhan as it begins to consolidate the acquisition of Cho Hung Bank, Korea's oldest bank. While return on equity at Shinhan improved to 23.07%, when consolidated with Cho Hung Bank the return slipped. It is the same story across all relevant ratios, demonstrating the task ahead of Shinhan as it merges the two entities.

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