Shinhan Financial Group Posts Record-High Q1 Net Profit of 1.6 Trillion Won... Securities and Non-Interest Income Surge

Interest Income Up 5.6%, Significant 26% Increase in Non-Interest Income

Record Results for the Bank as Well... Solid Growth Supported by Higher NIM

Securities Profits Surge Thanks to Bullish Stock Market... Up 167% Year-on-Year

Shinhan Financial Group recorded a record-high quarterly net profit of over 1.6 trillion won in the first quarter of this year. This was driven not only by solid banking performance but also by a significant improvement in the performance of its securities subsidiary, thanks to the domestic stock market boom. The expansion of non-interest income, such as fees, also contributed positively to improved results.

On April 23, Shinhan Financial Group announced through a disclosure that its net profit for the first quarter of this year reached 1.6226 trillion won, an increase of 9% compared to the same period last year (1.4883 trillion won). This marks the highest figure ever recorded for a quarter. The previous record was 1.5946 trillion won in the third quarter of 2022.

Interest income in the first quarter was 3.0241 trillion won, up 5.9% year-on-year. The group's net interest margin (NIM) rose from 1.90% in the first quarter of last year to 1.93% in the first quarter of this year, increasing by 0.03 percentage points. The increase in interest income was also attributed to continued asset growth. However, compared to the previous quarter, interest income decreased by 0.1% despite a 0.02 percentage point improvement in NIM, due to the effect of the number of days and other factors.

Non-interest income reached 1.1882 trillion won, up 26.5% compared to the same period last year. All segments of non-interest income—including fee income, securities-related income, and insurance income—grew evenly. Compared to the previous quarter, fee income increased mainly due to higher securities custody fees, and securities-related income, which had been weak in the previous quarter, also recovered, resulting in a 106.7% increase.

In the first quarter, selling and administrative expenses reached 1.5454 trillion won, up 9.3% year-on-year, due to expenses related to voluntary retirement and the impact of higher education taxes. The cost-to-income ratio (CIR) fell from 41.5% at the end of last year to 36.7% in the first quarter of this year, but Shinhan Financial Group explained that it remains at a stable level. Provisions for credit losses amounted to 512.5 billion won, up 17.5% year-on-year, as the volume of non-performing and disposed assets at the bank increased.

The group's overseas operations reported a profit of 221.9 billion won, up 4.9% year-on-year. By country, Vietnam contributed 58.1 billion won and Japan 42.3 billion won, respectively.

Looking at the performance by subsidiary, Shinhan Bank’s net profit for the first quarter was 1.1571 trillion won, an increase of 2.6% compared to a year earlier. Although fee income increased, non-interest income decreased due to reduced securities-related gains stemming from increased market volatility. However, solid interest income helped defend operating profit and sustained growth. NIM rose by 0.05 percentage points year-on-year, from 1.55% in the first quarter of last year to 1.60% this year. Won-denominated loans increased by 1.4% compared to the end of last year, mainly driven by corporate finance. Household loans, however, decreased by 0.6% over the same period.

Shinhan Investment Corp. posted a first-quarter net profit of 288.4 billion won, up 167.4% year-on-year, marking the highest first-quarter result ever. This was due to an increase in stock brokerage commissions as trading volume rose amid a bullish stock market, as well as improved product management gains. Compared to the previous quarter, which was weak due to reduced securities valuation gains, the company recorded a 1193.3% increase.

Shinhan Card posted 115.4 billion won, down 14.9% year-on-year. While operating revenue increased due to a rise in credit card transactions, net profit fell compared to a year earlier as voluntary retirement costs were reflected. Shinhan Life Insurance reported 103.1 billion won, down 37.6% year-on-year, due to a decrease in insurance profit from a widening difference between expected and actual loss ratios, as well as a decrease in financial profit from rising market interest rates. Shinhan Capital posted 61.8 billion won, up 97.3% year-on-year, as securities-related income increased amid the stock market boom.

As of the end of March, Shinhan Financial Group’s Common Equity Tier 1 (CET1) ratio stood at 13.19%, and the BIS capital adequacy ratio was 15.72%.

At a board meeting held on this day, Shinhan Financial Group resolved to pay a first-quarter dividend of 740 won per share. The acquisition of treasury shares totaling 700 billion won, scheduled to continue until July, is also underway.

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