Chairman Cho Yong-byoung of Shinhan Financial Group. (Photo: Shinhan Financial Group)

In the first half of this year, Shinhan Financial Group fared well, achieving its best-ever performance.

The financial group posted 2,443.8 billion won in net profit in the first half of this year, up 35.4 percent from the first half of 2020.

It earned 1,251.8 billion won in the second quarter of this year alone, up 30.7 percent from 1,805.5 billion won a year earlier. Shinhan Financial Group posted its biggest net profit ever in the second quarter of this year, following the first quarter on quarterly and biannual bases since its foundation in 2001.

Interest profits from its banking business, one of its key business areas, surged and non-interest profits increased due to the strong performance of most subsidiaries such as credit card, securities, capital and asset management companies, driving the overall performance of the financial group.

Shinhan Financial Group’s interest profits stood at 4,356 billion won, up 8.3 percent from the first half of 2020. Its non-interest profit grew 13.1 percent to 2,014 billion won in the same period, taking the lead in fueling the group’s growth.

The financial group also recorded growth by affiliates. Shinhan Bank, its key affiliate, racked up 1,370.9 billion won in net profit in the first half of 2020, up 20.2 percent from the first half of last year.

Shinhan Financial Investment and Shinhan Capital posted net profits of 322.9 billion won and 131.3 billion won, respectively. That is an increase of 465.5 percent and 55.0 percent, respectively.

Shinhan Card also earned 367.2 billion won, up 21.4 percent from a year before. Orange Life and Asian Trust earned 216.8 billion won and 35 billion won, up 57.7 percent and 81.5 percent, respectively.

“We enjoyed the even growth of profits by all affiliates such as Shinhan Bank, Shinhan Card, Shinhan Financial Investment, Shinhan Life, Orange Life and Shinhan Capital,” a Shinhan Financial Group official said.

“In the non-interest sector, we enjoyed an increase of 13.1 percent mainly in commissions and profits related to securities,” Shinhan Financial Group said.

“In particular, capital market-related subsidiaries such as Shinhan Financial Investment, Shinhan Capital and Shinhan Asset Management made substantial profits, significantly contributing to expanding the financial group’s earnings,” the official said.

“The profits improved in terms of both quantitative and qualitative aspects. These subsidiaries drove the group’s profits in the non-bank sector while accounting for 20 percent (507.4 billion won).”

Neither loan-loss provisions nor selling, general & administrative expenses weigh on Shinhan Financial Group.

In the first half of this year, its loan-loss provisions hit 359 billion won, down by 463 billion won and 56.3 percent from 822 billion won in the first half of 2020, when its loan-loss provision burden was heavy due to the COVID-19 situation.

Its selling, general & administrative expenses totaled 2,635.9 billion won, an increase of 166.7 billion won or 6.8 percent in the same period.

In particular, Shinhan Bank set aside 118.2 billion won in provisions in the first half of this year, down 69.2 percent from the first half of 2020 by flexibly responding to the prolonged low-interest rate and the pandemic situation.

As a consequence, the loan loss rate fell to 0.08 percent, the lowest-ever level.

“Based on systematic risk management considering the situation of the COVID-19 crisis, our financial group’s loan-loss costs remained stable since last quarter,” the official said.

“The group is actively supporting ordinary people’s lives and the real economy through various financial support programs. We will steadily implement such financial support programs in the future.”

Accordingly, the financial group made an improvement to indicators. Its return on equity (ROE) stood at 11.50 percent, up 2.11 percentage points from the first half of 2020.

Its return on assets also improved by 0.17 percentage points to 0.82 percent. Its net interest margin descended by only 0.03 percentage points to 1.81 percent. Its loan loss rate continued to stabilize at 0.20 percent, down by 0.30 percentage points.

Shinhan Financial Group’s monthly active users stood at 7.48 million for banking services, 5.14 million for credit card services and 860,000 for financial investment, up 9 percent, 26 percent, and 56 percent, respectively, from the end of 2020.