Shinhan Financial Group earned a cumulative net profit of 3,985.6 billion won in the third quarter of this year.
Its non-interest income contracted due to losses on securities derivatives transactions, but the financial group realized favorable results thanks to the management of bad debt expenses and an improvement in cost efficiency.
“Shinhan Financial Group’s net profit for the third quarter of 2024 stood at 1,238.6 billion, down 13.1 percent quarter on quarter due to losses in non-interest income,” Shinhan Financial Group announced on Oct. 25.
Its cumulative net income for the third quarter hit 3,985.6 billion won, up 4.4 percent year on year.
Shinhan Financial Group’s interest income for the third quarter ascended by 1.2 percent quarter on quarter.
This was driven by a 5 basis point quarter-over-quarter decline in its net interest margin (NIM), Shinhan Bank’s NIM, and a 3.1 percent quarter over quarter increase in interest-bearing assets.
Its non-interest income for the third quarter hit 827.8 billion won, down 25.6 percent quarter on quarter, primarily due to 135.7 billion won in losses on securities derivatives transactions.
Shinhan Financial Group’s global profit contracted by 15 percent quarter on quarter to 167.1 billion won due to an increase in bad debt expenses despite an increase in sales.
Its provision for loan losses in the third quarter descended by 33.9 percent to 431.1 billion won. It was blamed on the expiration of additional provisions related to real estate.
As of the end of September, its common equity tier 1 (CET1) ratio stood at 13.13 percent, empowering the financial group to maintain a stable capital ratio through appropriate RWA management.
“Even in a situation where non-interest income contracted due to losses on derivative transactions in securities, we maintained solid profitability through stable loan loss cost management, including preemptive provisioning, and higher cost efficiency,” said a representative of Shinhan Financial Group.
“Shinhan Financial Group will do everything it can do to strengthen its fundamentals by improving earnings power through a diversified business portfolio along with efforts to secure a preemptive loss absorption capacity.”
The Board of Directors of Shinhan Financial Group resolved to pay a dividend of 540 won per share for the third quarter and to buy back and retire its treasury shares totaling 400 billion won.
Of this buyback amount, the financial group will acquire 250 billion won by the end of 2024 and the remaining 150 billion won in early 2025.
By doing so, it will implement a year-round treasury stock policy starting from 2025 with a quarterly dividend policy which began in the first quarter of 2023.
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