[Click eStock] Record Earnings Expected for Shinhan Financial Group This Year... Target Price Up

Expectations Rise for Enhanced Shareholder Return

On September 10, Kiwoom Securities maintained its 'Buy' investment rating on Shinhan Financial Group, raising its target price from 150,000 won to 160,000 won. The firm cited expectations for record-high earnings in 2026, driven by robust profit growth and reduced provisioning costs this year.

Kim Eungap, an analyst at Kiwoom Securities, analyzed, "Shinhan Financial Group’s consolidated net profit for the second quarter of 2026 was 1.82 trillion won, a 17.5% year-on-year increase, marking the highest quarterly earnings ever. Interest income grew by 9.4%, non-interest income surged by 56%, and provisioning expenses declined compared to the same period last year."

Kim further noted, "Cumulative consolidated net profit for the first half reached 3.44 trillion won, up 13.3% year-on-year, putting the group on track for record annual results in 2026. In addition to a 7.7% increase in interest income and 19.7% growth in non-interest income, a 10.8% reduction in provisioning expenses significantly contributed to earnings improvement."

He also offered a positive outlook on Shinhan’s enhanced shareholder return policy. Kim stated, "The group is planning share repurchases of at least 1.4 trillion won (plus α) in 2026, representing a growth of over 12% compared to 2025. The acquisition amount exceeding 1.4 trillion won is scheduled to be announced in the fourth quarter, taking into account profit and capital adequacy trends."

He continued, "In the second quarter, the common equity tier 1 (CET1) ratio rose by 0.13 percentage points from the previous quarter to 13.43%. Since the group’s 2027 shareholder return target ratio of 50% was already achieved in 2025, the rate is expected to exceed 50% in 2026."

He added, "With higher profit growth, there is ample room for the scale of dividends and share buybacks to increase even further. The target PBR based on end-2026 BPS (book value per share) is 1.25x, and the ROE (return on equity) is projected at 10.6%."

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