Shinhan Financial trails KB in best quarterly bottom line on stock, loan fever

Shinhan Financial Group came neck and neck in first-quarter performance with its archrival KB, also delivering a record quarterly net profit of 1.2 trillion won ($1.1 billion) as it enjoyed industry-wide boon from stock frenzy and income from all-time private-sector loans.

The group disclosed Friday that its consolidated net income more than doubled from 464.4 billion won from the last quarter and gained 27.8 percent from a year ago.

Its operating income was estimated at 1.7 trillion won, up 77.3 percent from a quarter ago and 33.8 percent from a year earlier. Revenue grew 5.6 percent on quarter but fell 24.1 percent on year to 14.4 trillion won.

Shares of Shinhan Financial Group Co. are trading 1.2 percent higher at 37,650 won in Seoul, as of 11:30 a.m. on Friday.

The group said the bank unit’s net interest margin (NIM) turned around for the first time since the third quarter of 2018 while non-bank units delivered bumper earnings to drive up the group’s net profit to an all-time high on a quarterly basis.

Its interest income amounted to 2.12 trillion won, up 5.7 percent from a year earlier. Non-interest income jumped 40.4 percent on year to 1.03 trillion won.

The NIM for the group came to 1.81 percent and for the main lending unit Shinhan Bank 1.39 percent. Both figures are up 0.05 percentage point from three months ago, thanks to improved profitability from lending business and growth in prime assets.

It set aside 187.8 billion won as provisions for credit losses, with 53.2 billion won reserved to compensate customers who suffered massive losses from Lime Asset Management Co’s derivatives sold at its banking unit.

By subsidiary, Shinhan Bank delivered 656.4 billion won in net income, up 4.8 percent on year. Shinhan Investment raked in 162.4 billion won in net income, jumping 3.5 times from a year ago thanks to the sizzling retail stock investment boom. Shinhan Card’s net profit increased 32.8 percent on year to 168.1 billion won.

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