Shinhan Financial Achieves Record First-Half Results with 3.0374 Trillion Won in Net Profit

Despite Stagnant Interest Income, Fee Revenue Rises
First Time Surpassing 3 Trillion Won... Second-Quarter Net Profit Reaches 1.5491 Trillion Won
Bank Profit Up 10.4% as Lending Expands Despite Falling NIM

Shinhan Financial Group achieved a record-breaking net profit of 3.0374 trillion won in the first half of this year. Despite increasing provisions for loan losses due to concerns over an economic slowdown during a period of falling interest rates, non-interest income such as fees expanded, allowing the group to surpass 3 trillion won in quarterly net profit for the first time.

On July 25, Shinhan Financial announced through a regulatory filing that its net profit for the first half of this year was 3.0374 trillion won, up 10.6% from 2.747 trillion won in the same period last year. This marks the highest half-year performance in the group's history.

Chun Sangyoung, Vice President of Shinhan Financial's Finance Division, explained, "Despite an increase in credit loss expenses due to recent concerns about economic sluggishness and a slowdown in interest income growth caused by declining interest rates, performance has improved steadily, driven mainly by non-interest income. Efficient management of operating expenses also contributed to these results. Additionally, the improvement was supported by the elimination of one-off costs, such as the provisioning for losses related to Hong Kong H Index equity-linked securities (ELS) that occurred last year."

Net interest income for the first half reached 5.7188 trillion won, a 1.4% increase year-on-year. Due to the impact of lower interest rates, the group's net interest margin (NIM) fell from 1.97% in the first quarter of last year to 1.90%, but interest income saw a slight increase as lending expanded. Non-interest income rose 4.2% over the same period to 2.2044 trillion won.

Second-quarter net profit was 1.5491 trillion won, up 8.7% from the same period last year. This is the highest quarterly performance since the third quarter of 2022 (1.6244 trillion won). Net interest income for the second quarter was 2.864 trillion won, a 0.3% increase from the previous quarter. Vice President Chun stated, "We minimized the impact of falling market interest rates through efficient asset-liability management (ALM)." The second-quarter NIM was 1.90%, down 0.01 percentage points from the previous quarter. Notably, non-interest income such as fees stood out, reaching 1.265 trillion won, a 34.7% increase quarter-on-quarter. This was driven by higher capital market-related fee income, such as securities custody, and improved gains on securities due to lower interest rates.

Provisions for loan losses in the second quarter were 628.6 billion won, a 44.2% increase from the previous quarter. First-half global profit was 431.5 billion won, up 4.9% year-on-year, thanks to strategic growth focused on high-quality assets and proactive risk management that reduced credit loss expenses.

By subsidiary, Shinhan Bank's net profit for the first half was 2.2668 trillion won, a 10.4% increase from a year earlier. In the second quarter alone, it recorded 1.1387 trillion won. Despite falling interest rates, interest income was maintained through margin defense, and both fee income and gains related to securities increased. Due to the impact of regular corporate credit reviews in the second quarter, provisions for loan losses increased, resulting in a 0.9% rise from the previous quarter. The NIM also remained at 1.55% despite the lower interest rate environment.

Shinhan Card's net profit for the first half was 246.6 billion won, a 35.0% decrease year-on-year. This was due to lower merchant fees and increased funding and credit loss expenses. Shinhan Investment Corp. posted 258.9 billion won, a 25.0% increase over the same period, as proprietary trading gains and underwriting fees rose and selling and administrative expenses declined. Shinhan Life's net profit for the first half was 344.3 billion won, up 10.0% from a year earlier. In contrast, Shinhan Capital's net profit was 63.9 billion won, a 41.0% decrease over the same period.

As of the end of June, Shinhan Financial's Common Equity Tier 1 (CET1) ratio stood at 13.59%, and its BIS capital adequacy ratio was 16.20%.

On this day, Shinhan Financial's board of directors resolved to pay a dividend of 570 won per share and announced plans for an additional share buyback and cancellation worth 800 billion won.

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