Shinhan Financial Sets New Record in Just One Year with 3.4 Trillion Won Net Profit for First Half

Quarterly Net Profit Also Sets Record at 1.82 Trillion Won

Solid Banking Results Underpin Surging Growth in Securities and Asset Management
Fee and Other Non-Interest Income Drive Further Performance Gains
Non-Interest Income Rises to 30% of Group Profit; Non-Banking Affiliates Reach 35%
Shareholder Returns Set New High: Over 2.8 Trillion Won Expected This Year

Shinhan Financial Group posted a net profit for the first half of this year nearing 3.5 trillion won, breaking its previous record for the highest half-year performance in just one year. This was driven by solid banking and interest income results, as well as rapid growth in securities, asset management, and non-interest income thanks to a booming domestic stock market.

On the 23rd, Shinhan Financial Group announced via public disclosure that its net profit for the first half of this year reached 3.4427 trillion won, a 13.3% increase from the same period last year (3.0374 trillion won). This set a new half-year record, surpassing the 3 trillion won milestone that was first exceeded in the first half of last year, now broken again after just one year.

A Shinhan Financial Group representative stated, "We continued our strong profitability based on balanced growth between interest and non-interest income, achieving stable profit generation. At the same time, we efficiently managed credit loss expenses by leveraging robust loss-absorbing capacity built up to prepare for future uncertainties."

Interest income for the first half stood at 6.1585 trillion won, up 7.7% from the same period last year. This was due to the group’s net interest margin (NIM) improving from 1.90% in the first half of last year to 1.93% this year, as well as an expansion in loan assets. Shinhan Financial Group explained, "Through efficient asset and liability management (ALM), the group’s and the bank’s NIM improved by 0.03% and 0.05%, respectively, compared to a year ago."

Non-interest income amounted to 2.6381 trillion won, a substantial 19.7% increase over the same period. Although securities-related income declined due to higher market interest rates, fee income—particularly from securities custody commissions—increased, driving the improvement. Consequently, the proportion of non-interest income in group net profit rose by 2.2 percentage points year-on-year to 30%.

Global business performance for the first half reached 472.5 billion won, up 9.5% year-on-year, as operating profit increased thanks to differentiated strategies by region, despite rising market uncertainty.

Net profit for the second quarter was 1.8201 trillion won, a 17.5% increase from the same period last year (1.5491 trillion won), again setting a new quarterly record. Interest income rose to 3.1344 trillion won, up 3.6% from the previous quarter, with the group NIM maintained at 1.93% and the bank NIM rising 0.01 percentage points to 1.61%, reflecting cumulative asset growth. Non-interest income for the second quarter jumped 22% from the prior quarter to 1.4499 trillion won, thanks to increases in both fee income and securities-related income. Credit loss provisions for the second quarter stood at 437.3 billion won, down 14.7% from the previous quarter.

By affiliate, Shinhan Bank’s net profit for the first half was 2.4585 trillion won, marking an 8.5% increase from the same period last year. Breaking out the second quarter alone, profit reached 1.3014 trillion won. These figures represent record highs on both a quarterly and half-year basis. The improvement in first-half profit was due to the bank NIM rising from 1.55% in the first half of last year to 1.60% in the first half of this year, and a growth in accumulated loan assets. However, despite increased fee income, non-interest income declined as higher market interest rates compressed securities-related income. As of the end of June, the delinquency ratio stood at 0.34%, and the ratio of substandard or lower loans was 0.31%.

In particular, performance improvements among non-banking affiliates were also striking this time.

Shinhan Investment Corp. reported first-half net profit of 577.7 billion won, up 123.1% from the same period last year. This was fueled by a surge in commission income from equity brokerage and financial products on top of increased product investment income under strong domestic stock market conditions. Similarly, Shinhan Asset Management posted a significant increase, with net profit rising 135.1% year-on-year to 53.6 billion won, attributed to the continued growth in assets under management (AUM), particularly ETFs, and improved securities-related performance.

Shinhan Card’s net profit for the first half was 253.4 billion won, up 2.8% from a year earlier. Despite higher interest expenses due to rising market interest rates and increased selling, general and administrative costs from early retirement programs in the first quarter, the results were driven by a rise in credit card sales and a reduction in credit loss provisions. Shinhan Capital logged 94.7 billion won for the period, up 48.1% year-on-year, thanks to efficiencies in procurement costs and stabilization of credit costs. Shinhan Life recorded 290.6 billion won for the same period, a 15.6% decline, as the difference between expected and actual loss ratios widened. The share of group net profit attributable to non-banking affiliates improved by 5.3 percentage points year-on-year to 35%.

As of the end of June, Shinhan Financial Group’s Common Equity Tier 1 (CET1) ratio stood at 13.43%, and its BIS capital adequacy ratio was 15.74%.

At the board meeting held today, Shinhan Financial Group approved a second-quarter dividend payment of 740 won per share. The group also resolved to additionally repurchase and cancel treasury stock worth 700 billion won through direct acquisition by October. As a result, the cumulative treasury share buyback and cancellation for this year will reach 1.4 trillion won, exceeding the annual target of 1.25 trillion won. Total annual cash dividends are expected to reach around 1.4 trillion won, and, including these, total shareholder returns for the year are estimated to surpass 2.8 trillion won.

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