[Click eStock] Shinhan Financial Group, Overflowing Generosity from a Well-Stocked Storehouse

[Asia Economy Reporter Hwang Junho] Daishin Securities maintained the target price for Shinhan Financial Group at 50,000 KRW.

Shinhan Financial Group's net interest margin (NIM) based on banks improved by 18 basis points in the first half of this year alone. This is a relatively high figure compared to competitors.

Due to the recent rise in funding costs, it is not easy for large financial holding companies to improve NIM. However, Shinhan Financial Group has more low-cost deposits compared to competitors, such as securing the Seoul city treasury and deposits for small business loss compensation. Also, the high proportion of short-term variable rate loans seems to rapidly expand NIM during periods of rising interest rates.

The solid performance of non-bank affiliates also contributed. Daishin Securities expects non-interest income next year to slightly increase to 3.44 trillion KRW compared to this year.

The dividend policy is also proactive. Since 2020, the company has consistently repurchased and canceled treasury shares. In April and October of this year, they conducted treasury share repurchases and cancellations worth 150 billion KRW each time. Considering this, the dividend yield and payout ratio rose to 7.7% and 27.6%, respectively.

Park Hyejin, a researcher at Daishin Securities, stated, "Next year, Shinhan Financial Group's net profit is expected to reach 5.3 trillion KRW (2.4%), maintaining the top position," and "we also anticipate a forward-looking dividend policy befitting this."

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