Shinhan Financial Group announced Oct. 20 that its combined net profit in the first three quarters of this year surpassed the 2 trillion won mark for the first time in four years.
In a statement, the bank holding firm said the accumulated net profits for the three quarters stood at 2.16 trillion won ($1.92 billion), up 10.2 percent from 1.96 trillion won a year earlier. The group also said that its net income in the third quarter amounted to 707.9 billion won, up 3.6 percent from 6.83 billion won a quarter earlier.
It is the first time that the group's accumulated three-quarter net profit had surpassed 2 trillion won since 2012. The earnings outpaced earlier market consensus that its net profit in the third quarter may decline.
The group attributed the strong numbers to solid performances in its flagship banking division. The group¡¯s won-denominated loans have increased by 6 percent from the end of last year. Also, its profit on interest in the third quarter has increased by 7 percent, or 3.49 billion won year-on-year.
The group said its capital soundness has also improved. Its ratio of loans classified as substandard or below has decreased from 0.93 percent in the first quarter to 0.86 percent in the third quarter. The group's loan loss expense ratio declined by 47 basis points in the third quarter from 53 in the first quarter and 52 in the second.
Also noticeable was the surge of its credit card and life insurance units. Shinhan Card's net profit in the third quarter has grown by 2.1 percent year-on-year, while Shinhan Life's net income has surged 44.4 percent from a year earlier.
"Generally, the banking unit showed steep growth and non-banking units, such as credit card and insurance, also gained under harsh business conditions," a Shinhan Financial Group official said.
Flagship Shinhan Bank's net profit jumped 20.7 percent on-year to 1.51 trillion won in the first nine months of this year.
The stellar performance much owes to a fall in loan loss reserves set aside for exposures to bad debts from shipbuilders and shippers under restructuring process in the first half, as well as solid performances of non-banking units such as Shinhan Card Co. and Shinhan Life Insurance Co., said a company official. Shinhan Card¡¯s cumulative net profit in the nine months of this year rose 2.1 percent from a year ago to 532.6 billion won. Shinhan Life Insurance reaped 127.6 billion won in net income, up 44.4 percent on year.
Shinhan Financial Group Co., Ltd. (SFG) is a financial holding company. The Company operates through five segments: commercial banking services, which are provided by Shinhan Bank Co., Ltd. (Shinhan Bank); credit card services, which are provided by Shinhan Card Co., Ltd. (Shinhan Card); securities brokerage services, which are provided by Shinhan Investment Corp. (Shinhan Investment); life insurance services, which are provided by Shinhan Life Insurance Co., Ltd. (Shinhan Life Insurance), and other.
The company's other services include leasing and equipment financing, regional banking services, savings banking services, loan collection and credit reporting, collective investment administrative services and financial system development services, as well as engaging in private equity investments through formation of private equity funds on a private placement basis.
It also offers asset management services, including brokerage and trading of various securities.
A view of the building Shinhan Financial Investment, an affiliate of the group, has offices in Seoul. (Photos: SFG).