Shinhan Financial Group recorded operating profits in the two trillion won range in the first quarter of this year, setting a new profit record.
Shinhan Financial Group announced on April 22 that it posted 2,149.5 billion won in operating profit in the first quarter of this year, an increase of 14.9 percent compared to the same period of last year.
In addition, net income rose by 17.5 percent, or 1.4 billion won, from the same period last year.
Interest income increased by 17.4 percent to 2,487.6 billion won, thanks to a base effect from high loan growth, an increase in core deposits, and a margin improvement made by a rise in interest rates.
Its non-interest income fell 4.3 percent to 986.3 billion won.
By affiliate, Shinhan Bank racked up 863.1 billion won in net income, up 31.5 percent from the same period last year. Shinhan Bank’s net interest margin (NIM) in the first quarter stood at 1.51 percent, an improvement from 1.39 percent in the same period last year.
A Shinhan official attributed the result to an improved loan yield rate due to a rise in market interest rates, an increase in core deposits compared to the end of the previous year, and the stable management of the deposit cost rate.
By affiliate, Shinhan Card posted 175.9 billion won in net income, and Shinhan Capital 108.6 billion won, up 4.7 percent and 83.6 percent, respectively.
However, Shinhan Life’s and Shinhan Financial Investment’s net income decreased by 15.6 percent and 37.8 percent to 152.4 billion won and 104.5 billion won, respectively.
In overall, costs increased but were largely offset by improved profits. In the first quarter, Shinhan Financial Group's sales and general administrative expenses stood at 1.32 billion won, up 3.5 percent from the previous year. But its cost income ratio fell from 40.6 percent to 38.1 percent.
“Our cost increased due to continuous digital investment,” the official explained. “Despite inflationary pressure, we successfully managed it at a stable level.”
In the meantime, Shinhan Financial Group announced on May 2nd that it has signed an equity investment contract to acquire a 10-percent stake in Tiki, a leading Vietnamese e-commerce company with more than 20 million members.
Shinhan Bank and Shinhan Card, major affiliates of Shinhan Financial Group, plan to acquire 7.44-percent and 2.56-percent stakes in Tiki, respectively.
Tiki is leading the e-commerce market in Vietnam. It is enjoying high economic growth despite the COVID-19 pandemic, with a variety of products from food to digital services and fast delivery services.
Shinhan Financial Group entered Vietnam and has been carrying out active sales activities to local customers in various fields such as retail, corporate finance, IB, and WM.
In the future, Shinhan Financial Group will create synergies in various fields such as the diversification of customer contact points, the advancement of credit evaluation based on non-financial information and dealing with the digital environment through strategic alliance with Tiki.
“We expect to be able to create a new convergence digital ecosystem in Vietnam based on Shinhan Financial Group’s financial expertise and Tiki’s rich and valuable data,” a Shinhan Financial official said.