Shinhan Financial Group Reports 3Q Net Profit of 1.1921 Trillion KRW, Down 26% YoY

Shinhan Financial Group announced on the 27th that its net profit for the third quarter decreased by 26.6% year-on-year to 1.1921 trillion KRW.

The cumulative net profit for the third quarter also fell by 11.3% to 3.8193 trillion KRW. This was due to the disappearance of the gain from the sale of the Shinhan Investment Corp. building recognized in the same period last year (after-tax 322 billion KRW), among other factors.

Shinhan Bank, Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@

Shinhan Financial's interest income for the third quarter increased by 1.1% to 2.7633 trillion KRW, and cumulative interest income rose by 2.5% to 8.0313 trillion KRW. The company explained that the increase in cumulative interest income was due to the growth of interest-bearing assets and margin improvements in the bank and group. The cumulative net interest margin (NIM) rose by 0.01 percentage points each to 1.61% for the bank and 1.96% for the group.

Non-interest income increased by 68.1% to 913.3 billion KRW, and cumulative non-interest income grew by 32.9% to 2.9458 trillion KRW. The increase in cumulative non-interest income was also largely supported by improved fee income and the effect of the disappearance of losses in the securities sector due to the sharp rise in interest rates.

The provision for loan losses in the third quarter surged by 86.7% to 467.8 billion KRW, and on a cumulative basis, it increased by 73.4% to 1.4773 trillion KRW. The expansion of cumulative loan loss provisions was influenced by the continued rise in interest rates and the increase in delinquency rates in banking and card sectors. The cumulative loan loss cost ratio was 0.50%, and excluding additional provisions, it was 0.36%.

By subsidiary, Shinhan Bank's third-quarter net profit rose by 1.0% to 918.5 billion KRW, and cumulative net profit increased by 0.1% to 2.5991 trillion KRW. Both interest income and non-interest income increased, but this was offset by higher selling and administrative expenses due to inflation and increased loan loss costs from accumulated interest rate hikes.

Shinhan Card's third-quarter net profit decreased by 13.0% to 152.2 billion KRW, and cumulative net profit also fell by 20.2% to 469.1 billion KRW. The main causes were increased funding and loan loss costs due to rising interest rates and higher selling and administrative expenses due to inflation.

Shinhan Investment Corp. posted a net loss of 18.5 billion KRW in the third quarter, turning to a deficit, while Shinhan Life recorded a net profit of 115.9 billion KRW, down 13.7%. Shinhan Capital achieved a net profit of 102.8 billion KRW, up 30.5%.

Meanwhile, Shinhan Financial's board of directors resolved on the 25th to pay a quarterly dividend of 525 KRW per share and to acquire and retire treasury shares worth 100 billion KRW. Shinhan Financial stated, "The cumulative quarterly dividend for this year amounts to 1,575 KRW per share, and the cumulative amount of treasury share acquisition and retirement has reached 500 billion KRW," adding, "We are consistently pursuing shareholder return policies based on excellent capital adequacy and stable profit-generating capabilities."