Shinhan Financial Group, one of South Korea’s top four financial service providers, reported a sharp decline in profit in the last three months of 2024 on Thursday, citing increased expenses from trading and management that ate into its margins.
The finance giant recorded over 4.5 trillion won ($3.1 billion) in yearly net profit in 2024.
Shinhan Financial Group posted 473.4 billion won in fourth-quarter net profit, down 63.5 percent on-quarter. Compared to the same period in 2023, profit declined by 13.9 percent.
Its non-interest income in the fourth quarter stood at 235.7 billion won, marking a 74 percent drop from 907.2 billion won in the previous quarter. Its net interest income was 2,909.6 billion won, up 1.9 percent on-quarter.
The company attributed the decline in non-interest income, including securities profit, to heightened market volatility, expenses for voluntary resignations, and increased provisions for bad debt.
In October, the group’s quarterly closing revealed that Shinhan Securities’ futures and options trading division was involved in unauthorized futures trading that resulted in losses of up to 130 billion won.
Despite the limp in the fourth quarter, Shinhan Financial Group recorded 4.51 trillion won in yearly net profit in 2024, up 3.4 percent on-year, with its key affiliate Shinhan Bank leading the growth.
The lender logged 3.69 trillion won in net profit last year, an increase of 20.5 percent from the year before, outpacing its rivals for the first time in over six years since 2018. Hana Bank and KB Kookmin Bank logged 3.35 trillion won and 3.25 trillion won in net profit last year.
The group's global profit in 2024 stood at 758.9 billion won, marking a 38.1 percent rise on-year, bolstered by the strong figures from its operations in Vietnam and Japan. The strong dollar also attributed to the increase of profit in the Korean won.
“Amid the tough business environment with heightened volatility in the financial market in the fourth quarter, the group maintained its strength, backed by its key affiliate Shinhan Bank, which was able to keep the group in the black,” an official from Shinhan Financial Group said.
By Im Eun-byel (silverstar@heraldcorp.com)
