Shinhan Financial Group Racks Up 1.388 Trillion Won in Net Profit in Q1

Chairman Jin Ok-dong of Shinhan Financial Group. (Photo: Shinhan Financial Group)

Shinhan Financial Group posted a net profit of over 1 trillion won in the first quarter of this year.

Despite a decline in interest income and the accumulation of provisions for internal and external uncertainties, the financial group once again demonstrated its fundamental strength by posting a slight decline from the same period a year ago.

Its non-interest income and global growth enabled the financial group to put up a good fight in terms of its overall business performance.

Shinhan Financial Group announced on April 27 that it ramped up 1.388 trillion won in net profit in the first quarter.

This represented a drop of 0.9 percent from 1.4004 trillion won in the same quarter a year earlier, but it will reach a jump of 0.2 percent if applying the new accounting standards (K-IFRS) retroactively to past results.

Interest income came in at 2.5401 trillion, down 10 percent from the previous quarter, but it increased 2 percent year on year as the net interest margins (NIMs) of Shinhan Financial Group and Shinhan Bank declined.

Non-interest income reached 1.0329 trillion won, turning positive from a loss in the previous quarter and expanding by 17 percent from a year earlier.

A Shinhan Financial Group official attributed the increase to higher securities gains and commission income due to a drop in the market interest rate.

Shinhan Financial Group’s business results in the first quarter are the more meaningful because they came despite increasing provisions to cope with economic uncertainties.

The group’s provision for loan losses in the first quarter amounted to 461 billion won, up 89.4 percent from a year earlier. Additional provisions set aside to deal with economic fluctuations including COVID-19 amounted to 185 billion won, up 2.5 times from 74.5 billion won a year earlier.

Shinhan Financial Group made substantial profits abroad, too. Its net profit in the global segment rose 23.9 percent year on year to 158.3 billion won.

“Our differentiated growth strategies in each country are playing an important role in generating profits for the group,” a group official said.

By subsidiary, Shinhan Bank, its flagship subsidiary, posted a net profit of 931.5 billion won in the first quarter, up 7.9 percent from the same period a year earlier.

While its SG&A expenses increased to 63.2 billion won due to the impact of inflation and its bad debt expenses grew to 85.6 billion won due to preemptive provisioning, its interest income expanded due to increased loan assets and a higher NIM. It recorded the generation of non-interest income including gains on securities.

Shinhan Investment & Securities posted a net profit of 119.4 billion won in the first quarter, up 14.3 percent from a year earlier. It turned a profit after a loss in the previous quarter.

Shinhan Card posted a net profit of 166.7 billion won in the first quarter, up 210.4 percent or 113 billion won quarter on quarter, but down 5.2 percent year on year. Shinhan Capital posted 92.2 billion won in profit.

This represented an increase of 342.5 percent from the previous quarter, but a decrease of 15.2 percent from a year earlier.