Shinhan Bank CEO Jung Sang-hyuk, right, shakes hands with Arijit Sanyal, CEO of Credila, after signing an agreement to acquire a stake in the Indian student loan company in Mumbai, India, Wednesday. Courtesy of Shinhan Bank

Shinhan Bank is acquiring a stake in HDFC Credila Financial Services, a student loan company in India. It is the bank's first advancement into the global market in the form of equity investment, instead of launching branches of corporations.

The bank announced that it signed a contract to acquire a stake in Credila in Mumbai, India, Wednesday. It is the first equity investment into an Indian company by Korean commercial banks.

Established in 2006, Credila is the top student loan company in the Indian non-banking financial company market. It is expected to continue growth thanks to India's passion for education, rising number of people pursuing studies abroad and increasing demand from major advanced countries on science, technology, engineering and mathematics talent from India.

Credila will issue new shares and Shinhan Bank will be acquiring approximately $180 million worth of the new shares. The bank will be holding around a 10 percent stake of Credila. Among other shareholders of Credila is HDFC Bank, the biggest private bank in India.

Shinhan Bank advanced into India in 1996, the first among Korean banks. It currently operates six branches. The bank's India operation reaped 10 billion won in profit in 2023, up 117 percent from the previous year. Shinhan explained that it plans to expand its retail business in India while cooperating with diverse Indian companies to make a leap forward as a global financial company.

"Amid global supply chain restructuring, the importance of the Indian market, which has geopolitical stability and infinite growth potential from 1.4 billion population, is increasing more than ever," Shinhan Bank CEO Jung Sang-hyuk said.

"By jointly investing with competitive local partners in Credila, which boasts the best competitive edge in India's retail loan market, we will enhance competitiveness of our Indian operation while expanding various collaborative businesses," he said, adding that the collaboration will include not only traditional financial companies but also digital companies.

Last year, Shinhan Bank reaped 549.3 billion won in net profit across the global market, which is the biggest among Korean local banks. It was backed up by solid performance in major global channels such as Vietnam and Japan.