April 20, 2024

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[THE INVESTOR] Shinhan Financial Group recorded a better than expected net profit in the first half of the year but failed to reclaim its top position from KB Financial Group.

The financial group recorded 1.8 trillion won (US$1.58 billion) net profit in the first half of the year, increasing 11.3 percent from the same period last year, excluding a one-time profit of 280 billion won in loan loss reserve in the first quarter last year. Including the 280 billion won, Shinhan’s net profit was down 5 percent from a year earlier. 

In the second quarter, the group’s net profit grew 9.4 percent to 938 billion won in the second quarter, recording its best second-quarter performance since 2011.

The figures were better than market consensus of 1.7 trillion won for the first half of the year and 867 billion won for the second quarter.

“The banking sector is seeing a stable profit growth while non-banking sectors such as investment and capital are also making decent profit,” an official at the group said on July24. “The good performance was possible due to growth in both interest margin and non-interest margin while bad loan reserves wasn’t big.”

The financial group’s flagship Shinhan Bank made 1.27 trillion won in net profit in the first six months, up 15.2 percent from a year ago. The net profit of non-banking sector stood at 619 billion won, falling 28.4 percent from a year ago, largely due to Shinhan Card’s one-off profit logged last year.

Even with a better-than-expected performance, Shinnah failed to reclaim its lost title of most profitable financial group in Korea from its archrival KB Financial Group. KB Financial recorded 1.9 trillion won for the first half of the year, increasing 2.9 percent from the same period in 2017.

By Park Ga-young (gypark@heraldcorp.com)