Jeju Bank will still have Shinhan FG support despite diluted stake

The Korean bank will expand its business outside of Jeju Island, says Moody’s.

Jeju Bank is expected to continue receiving “a very high level” of affiliate support from Shinhan Financial Group (FG) despite the latter’s now lower stake in the bank.

The South Korean bank issued 5.7 million new shares to Douzone Bizon Co. on 25 April 2025, diluting Shinhan FG’s stake to 64.01% from 75.31%.

“Shinhan FG will maintain its current operational oversight by monitoring Jeju Bank's key risks and allocating risk capital. Additionally, if Jeju Bank faces liquidity shortage, the bank may also directly borrow funds from Shinhan FG,” said Moody’s Ratings.

Jeju Bank reportedly plans to gradually expand its business outside of the Jeju Island to offer services to small and medium enterprises (SMEs). The bank is expected to leverage Douzone’s real-time durables related to SMEs.

Funding will reportedly remain solid thanks to its high deposit market share in its home region.

Liquidity coverage ratio is 123% in Q4 2024, higher than the minimum regulatory requirement of 100%.

Overall, Jeju Bank is expected to have good funding and liquidity, adequate capitalisation, counterbalanced by its weak asset quality and slow profitability, Moody’s said.