ASTANA ― Many local lenders have gone into survival mode as a long streak of low interest rates continues to squeeze their returns. But some are striving for more than just getting by ― they are finding ways to take advantage of the situation.

Shinhan Bank, the country’s second-largest lender, is among the few that saw a rise in profits in the first quarter of this year as it benefited from improved cost control and shedding bad loans, according to Suh Jin-won, president and CEO of the bank.

“It is a difficult time for everyone, certainly, but we also see new opportunities,” Suh told reporters on the sidelines of the Asian Development Bank’s annual meeting in Astana, Kazakhstan, on Sunday. 

Shinhan has been actively expanding its overseas business to diversify its profit sources away from the already highly saturated home market.

This year, the bank aims to expand its overseas activities, in particular, in the Eastern European and Southeast Asian regions, according to the CEO.

“We received permission last year to open an office in Poland. We’re expecting to complete the setup by the third quarter of the year,” he said.

The new office in Poland along with its local corporation in Frankfurt, Germany, are key logistical points from where the lender aims to provide various financial services to Korean firms operating in the region, the CEO said.

Shinhan, which set up a local corporation in Vietnam in 2007, is actively searching for merger and acquisition opportunities in Indonesia, in order to establish what Suh calls a business belt in the Southeast Asian region.

For the first three months of the year, the bank posted a profit of 425.1 billion won ($415 million), compared with 337 billion won in the same period last year.

The rise in profits is mainly due to a reduction in bad loans, the CEO admitted. The commercial bank saw impairments on loans in or near default decline 76.8 percent to 572 billion won in the quarter from the previous year, reflecting “preemptive risk management” amid economic uncertainties at home and abroad.

The first quarter results also show a number of positives, he added.

“Our financial performance was also driven by improvements in our overall portfolio,” he said.

“Although it is a difficult time to maintain profits due to a long streak of low interest rates, we will continue to take an active stance on business operations for future growth.”

By Oh Kyu-wook (596story@heraldcorp.com)