You must use 'servname_shb'@'localhost' as the username. Your request become:
CREATE USER 'servname_shb'@'localhost' IDENTIFIED BY 'password';
GRANT ALL ON *.* TO 'servname_shb'@'localhost';
Note: 'servname_shb'@'localhost' only allow connection from localhost. You can use 'servname_shb'@'%' to allow connection from everywhere.