Shinhan Financial Group announced on July 22 that the group’s second-quarter net income reached 1,320.4 billion won, a decrease of 5.7 percent against the previous quarter, due to the accumulation of provisions for bad debts related to the COVID-19 situation and economic responses, and a decrease in non-interest income despite stable operating profit.
Meanwhile, net profit during the first half of 2022 sat at 2,720.8 billion, an increase of 11.3 percent compared to the same period of 2021, thanks to the strong profit contribution of key group affiliates, such as Shinhan Bank and Shinhan Card, and high profit growth in the global sector.
Shinhan Financial Group’s interest income in the second quarter amounted to 2,644.1 billion won, up 6.3 percent from the previous quarter.
Accordingly, its interest income in the first half of the year inflated 17.3 percent to 5,131.7 billion won compared to the same period of the previous year.
Its interest income in the second quarter of 2022 grew 6.3 percent, or by 156.5 billion won, from the previous quarter due to an improvement in margins and the growth of loan assets centered on corporate loans.
In particular, a rise in market interest rates pushed up demand for loans from corporate customers. Its loan assets increased through selective growth centered on high-quality borrowers.
Shinhan Financial Group’s and Shinhan Bank’s second quarter NIM stayed at 1.98 percent and 1.63 percent, respectively.
In the second quarter, Shinhan Bank’s NIM improved by 12 basis points compared to the first quarter thanks to an improvement in the bank’s loan asset yield following a rise in the benchmark interest rate.
But Shinhan Financial Group’s NIM ascended by 9 basis points due to an increase in financing cost in the credit card business sector.
Meanwhile, Shinhan Financial Group’s and Shinhan Bank’s cumulative NIMs in the first half of 2022 maintained an improvement trend by logging 1.94 percent and 1.58 percent, respectively.
“Our profit in the second quarter dropped from the previous quarter due to the impact of one-off expenses incurred due to provisions for the COVID-19 situation and economic responses,” a Shinhan Financial Group official said.
“But excluding them, our ordinary net income remained sound despite a little slowdown in non-interest income.”
“We will do our best to boost our corporate value by creating a virtuous cycle structure in the overall financial environment that contributes to the growth of customers and society by giving financial support to small business owners and young people, and mitigating systemic risks in the mid- to long-term,” he added.
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