Shinhan Financial Group Logs Highest-Ever Annual Net Profit

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

Shinhan Financial Group posted a record-high net profit of 4.6423 trillion won in 2022.

Its non-interest income shrank due to a drop in securities income, among other reasons, but interest income inflated by nearly 18 percent compared to 2021 due to the effects of rising interest rates, driving earnings growth.

Shinhan Financial Group decided to purchase and retire 150 billion won worth of treasury stocks as part of its efforts to boost its shareholder return. Its 2022 dividend was set at 865 won and its dividend payout ratio at 22.8 percent.

Shinhan Financial Group announced on Feb. 8 that its 2022 net profit stood at 4,642.3 billion won.

This amount represented a 15.5 percent increase from 2021.

Its stellar performance in 2022 was largely attributable to stable earnings contributions from the banking sector and gains from Shinhan Investment & Securities’ sale of office buildings.

Its ordinary net income grew by 7.5 percent, excluding gains (443.8 billion won before tax) from the sale of Shinhan Investment & Securities’ office building in Yeouido, Seoul.

Net profit in the fourth quarter of 2022 amounted to 326.9 billion won, down 28.9 percent from the same period of 2021.

This reflects one-off factors such as the recognition of loss on evaluation of alternative investments, due to changes in its accounting system on principal preservation trust and interest rate hikes, early retirement expenses and compensations for customer losses related to investment products.

Shinhan Financial Group's interest income reached 10,675.7 billion won, up 17.9 percent from the previous year due to an increase in assets and a base interest rate hike.

The net interest margins (NIMs) of Shinhan Financial Group and Shinhan Bank was 1.96 percent and 1.63 percent, respectively, climbing by 0.15 percent and 022 percent points from 2021.

Its non-interest income fell 30.4 percent on year to 2,531.5 billion won as commissions and securities-related gains slid. In particular, of the non-interest income, commission income fell 5.6 percent.

Securities-related gains and losses shrank by 43.4 percent due to valuation losses following a steep rise in the interest rate.

On the other hand, insurance-related profits rose by 2.2 percent thanks to solid insurance sales such as an improvement in operating expenses.

Global business profits also contributed to making an improvement in earnings. Last year, the group’s global profit stood at 564.6 billion won, up 43 percent from 2021.

The proportion of the global business profits in the group’s total annual profit sat at 12.2 percent, an improvement of 2.4 percentage points compared to 2021.

By subsidiaries, Shinhan Bank’s net profit in 2022 stood at 3.45 trillion won, up 22.1 percent from the previous year.

Shinhan Card racked up 641.4 billion won in net profits, down five percent from 2021.

Shinhan Investment & Securities chalked up 412.5 billion won in net profits, up 28.6 percent from 2021.

Shinhan Capital’s net profits added up to 303.3 billion won, up 10.3 percent from 2021.