[Click e-Stock] Shinhan Financial Group: Shareholder Return Ratio Rises, Target Price Up 14%

On July 28, Kiwoom Securities raised its target price for Shinhan Financial Group to 95,000 won. The reasons cited were an upward revision of earnings forecasts and an increase in shareholder return ratio.

Shinhan Financial Group's consolidated net profit for the second quarter was 1.55 trillion won, an increase of 8.7% compared to the same period last year. The cumulative consolidated net profit for the first half reached 3.04 trillion won, surpassing the 3 trillion won mark for the first time and setting a new record high. This figure represents a 10.6% increase compared to last year.

Kim Eungap, an analyst at Kiwoom Securities, projected that Shinhan Financial Group will achieve a record-high consolidated net profit of 5.14 trillion won this year, up 13.7% from last year.

Kim explained, "Among non-banking subsidiaries, investment securities and life insurance showed profit growth compared to the previous quarter, contributing to overall profit growth." He added, "The proportion of non-banking profit is 30.3%. Although this is still significantly lower than the previous level of around 40%, it is recovering from 24% in 2024."

Kim maintained a 'buy' investment opinion on Shinhan Financial Group and raised the target price from the previous 83,000 won to 95,000 won, taking into account the upward revision of earnings forecasts and the increase in shareholder return ratio.

He said, "Shinhan Financial Group announced a share buyback of 800 billion won, with 600 billion won to be executed in the second half of the year and 200 billion won scheduled for January next year." He continued, "By including the 600 billion won in the 2025 shareholder return, the 2025 shareholder return ratio forecast has been raised from 42% to 46%."

He further stated, "Although the target shareholder return ratio for 2027 is set at 50%, it seems possible to achieve this earlier." He added, "At the end of the second quarter, the common equity tier 1 (CET1) ratio was 13.59%, up 0.32 percentage points from the previous quarter. In addition to profit growth, a 1.2% decrease in risk-weighted assets due to a decline in the exchange rate had a significant impact."