Shinhan Financial Group Reports 1Q Net Profit of 1.1919 Trillion KRW... "Largest Since Inception" (Update)

Increase in Bank Net Interest Margin and Improvement in Non-Bank Performance

[Asia Economy Reporter Kwangho Lee] Shinhan Financial Group posted a net profit of 1.2 trillion KRW in the first quarter of this year, achieving the highest quarterly performance since its founding. Analysts attribute the profit increase to portfolio diversification efforts, including the bank's net interest margin (NIM) growth, improved performance in the non-bank sector, and cost reduction initiatives.

On the 23rd, Shinhan Financial announced a net profit of 1.1919 trillion KRW for the first quarter. This represents a 27.8% increase compared to 932.4 billion KRW a year ago.

The group's total assets reached 618.8 trillion KRW, up 7.0% from 578.2 trillion KRW a year earlier. The non-performing loan (NPL) ratio stood at 0.56%, the Basel III (BIS) capital adequacy ratio was 15.9%, and the common equity tier 1 (CET1) ratio was 11.9%, maintaining both asset soundness and capital adequacy at stable levels.

Shinhan Financial stated, "The key feature of this performance is that the group's net profit has leveled up based on the fundamental strength of both the banking and non-banking sectors. The banking sector's performance improved through an early asset growth strategy and a net interest margin improvement for the first time in two years, while the consistent non-bank focused growth strategy pursued over the past four years has begun to show visible results."

In particular, the banking sector saw a quarterly net interest margin improvement (+5 basis points) for the first time since the third quarter of 2018, and secured a solid operating profit base by expanding stable financial support to small and medium-sized enterprises and small business owners, thereby strengthening its foundational capabilities to respond to the post-COVID-19 environment.

The non-bank sector demonstrated stable performance through active collaboration among group companies based on the One Shinhan strategy. Notably, the solid growth of key non-bank affiliates such as card and capital companies, along with a remarkable 260% year-on-year improvement in the securities sector?which had faced difficulties last year due to investment product-related costs?greatly contributed to the non-bank segment's profit and loss improvement.

Furthermore, the qualitative growth of the group's new growth engines continues, with expanding quarterly achievements in core market areas such as global and capital markets.

Meanwhile, based on the results of the Lime Asset Management Credit Insured (CI) Fund Dispute Mediation Committee held on the 19th, Shinhan Financial recognized costs amounting to approximately 65% (previously about 30%) of the expected loss to faithfully fulfill the responsibilities of the sales company.

Shinhan Financial said, "We will continue efforts to resolve uncertainties going forward," adding, "Through this, we plan to restore market trust and strive to become a sustainable growth company."

This content was produced with the assistance of AI translation services.