Shinhan Financial Group Posts Q1 Net Profit of KRW 1.4883 Trillion, Up 12.6% Year-on-Year

Interest Income Reaches KRW 2.85 Trillion; Non-Interest Income at KRW 939.3 Billion
Bank Posts KRW 1.13 Trillion Profit, Up 20% on Higher Interest Income

Shinhan Financial Group's net profit for the first quarter of this year increased by 13% compared to the same period last year. The improvement in performance was attributed to the absence of one-off expenses, such as provisions for losses related to Hong Kong H Index equity-linked securities (ELS) that occurred in the first quarter of last year, as well as an increase in interest income.

On April 25, Shinhan Financial Group announced through a public disclosure that its consolidated net profit attributable to controlling interests for the first quarter of this year was KRW 1.4883 trillion, up 12.6% year-on-year. While this figure falls short of the record quarterly profit achieved in the third quarter of last year (KRW 1.5946 trillion), it marks the highest first-quarter profit in the group's history. It also exceeded the securities market consensus estimate of KRW 1.4391 trillion.

A Shinhan Financial Group representative explained, "Despite various unfavorable factors, including heightened domestic and global economic volatility, the group delivered solid results thanks to the robust performance of its banking business and normalization efforts at non-banking subsidiaries such as securities and asset trusts, which underperformed last year."

The representative added, "Even amid declining market interest rates, we defended our net interest margin through efficient reduction of funding costs. We also maintained stable operating profit by achieving asset growth centered on corporate loans, supported by proactive financial assistance to small and medium-sized enterprises and small business owners."

Interest income for the first quarter was KRW 2.8549 trillion, up 1.4% from the same period last year but down 1.9% from the previous quarter. The net interest margin (NIM) was 1.91%, up 0.05 percentage points from 1.86% in the fourth quarter of last year. However, it was 0.09 percentage points lower than the 2.00% recorded in the first quarter of last year.

A Shinhan Financial Group representative stated, "Although the group's NIM declined year-on-year, interest income increased due to cumulative asset growth over the year. Compared to the previous quarter, NIM improved, but overall group profit decreased as interest income from the securities and capital businesses declined."

Non-interest income for Shinhan Financial Group in the first quarter was KRW 939.3 billion, down 6.3% year-on-year but up 275.3% from the previous quarter. A group representative explained, "This was due to a recovery in profits related to marketable securities following a decline in market interest rates, as well as the disappearance of valuation losses on marketable securities that were recognized in the previous quarter."

By subsidiary, Shinhan Bank recorded a net profit of KRW 1.1281 trillion in the first quarter, a 21.5% increase year-on-year. The increase in loan assets led to higher interest income, and non-interest income also grew, mainly from investment banking fees, resulting in higher operating profit. In particular, the disappearance of increased selling and administrative expenses related to securities and derivatives losses and early retirement costs recognized in the previous quarter led to a 90.3% increase in profit compared to the previous quarter.

Shinhan Card's net profit for the first quarter was KRW 135.7 billion, down 26.7% year-on-year. This was due to a decrease in card fee income resulting from expansion of the member infrastructure and increased customer marketing expenses, as well as higher credit loss costs. Shinhan Investment Securities posted KRW 107.9 billion, up 42.5% over the same period, while Shinhan Life recorded KRW 165.2 billion, up 7.1%. Shinhan Capital posted KRW 31.3 billion, down 51.3% year-on-year, but returned to profitability compared to the previous quarter.

Meanwhile, the group's global profit and loss decreased by 1.5% year-on-year, but with expanded operating revenue and proactive risk management, it recorded KRW 211.6 billion, maintaining solid profits above KRW 200 billion. As of the end of March, the common equity tier 1 (CET1) ratio stood at 13.27%, and the Bank for International Settlements (BIS) capital adequacy ratio was 15.97%.

Prior to the earnings announcement on this day, Shinhan Financial Group held a board meeting and resolved to pay a first-quarter dividend of KRW 570 per share.

In addition, the group announced its "2025 Detailed Action Plan for Enhancing Corporate Value," which includes raising return on equity (ROE), increasing the CET1 ratio to above 13.1%, and achieving a shareholder return ratio of over 42%.