Shinhan Financial Group netted 2.917 trillion won in net profit last year, the second biggest since 2011 when the financial group logged 3.100 trillion won in net profit, the group said Feb. 7. The 2017 net profit, up 5.2 percent YoY, on consolidated basis, would have been bigger had it excluded such one-time expenses as retirement fees for early retirees and loan loss provisions, the group said, adding that the group might have to yield the leading spot in net profit among the major financial groups in the country to KB Financial Group for 2017.
The net profit for 2017 failed to meet the estimates, but showed increase for four years in row since 2014 topping the 2016 net profit of 2.774,8 trillion won.
The biggest surprise in net profit was the interest earnings which increased 8.8 percent from the preceding year to 7.843 trillion won. The company attributed the rise to boosts in NIM (net interest margin) and loans, officials of the group said. They said non-banking sectors including financial investment, asset management, capital and savings banks, along with the global operation sector have also contributed to net profit.
Shinhan Bank, the core affiliate of the group, posted a net profit of 1.711 trillion won in 2017, down 11.8 percent YoY due mainly to one-time expenses such as early retirement funds, amounting to 180 billion won, a loss of investments in D’Live amounting to 150 billion won and loan loss provisions for Daewoo Shipbuilding and Kumho Tire amounting to 120 billion won, bringing one-time expenses to 450 billion won.
The bank’s NIM in the 4th quarter came to 1.58 percent, up 0.07 percent from the preceding year and up 0.02 percent from the preceding quarter.
The net profits of non-banking affiliates such as Shinhan Card, Shinhan Financial Investment, and Shinhan Capital came to 1.371 trillion won, up 31.1 percent YoY with Shinhan Card netting 913.8 billion won in profit, up 27.6 percent YoY and Shinhan Financial Investment netting 211.9 billion won in profit, up 83.6 percent YoY.
Shinhan Bank is a bank headquartered in Seoul, South Korea.
It was the first bank in Korea, established under the name Hanseong Bank in 1897. The bank was reestablished in 1982. It is part of the Shinhan Financial Group, along with Jeju Bank. Chohung Bank merged with Shinhan Bank on April 1, 2006.
Shinhan Bank started as a small enterprise with a capital stock of 25.0 billion won, 279 employees and three branches on July 7, 1982. It has transformed itself into a large bank, boasting total assets of 176.9 trillion won, equity capital of 9.7 trillion won, 10,741 employees, and 1,026 branches as of 2006. As of June 30, 2016, Shinhan Bank had total assets of 298.945 trillion won ($260 billion), total deposits of 221.047 trillion won and loans of 212.228 trillion won. Shinhan Bank is the main subsidiary of Shinhan Financial Group.
Hanseong Bank was established by Kim Jong-han in 1897, but began operating around 1900. It was originally located in a small house with only two rooms. One room was for the president, Yi Jae-won, and the other room was for the staff. The bank operated by borrowing money from Japanese banks at low interest rates and then loaning it out for twice the rate to the Korean market.
The Bank was successful because despite lending out money at twice the rate it borrowed it at, the bank's interest rates were still far lower than what could be obtained elsewhere in Korea at that time.
The bank's first property it used as collateral on a loan happened to be a donkey. The bank staff were challenged to feed and care for their collateral as the loan was out.