Shinhan Financial Group announced a record first-quarter net profit of 1.62 trillion won ($1.1 billion) on Thursday, driven significantly by robust brokerage earnings that enhanced non-interest income.
This impressive net profit figure represents a 9 percent increase from the previous year, establishing a new peak for the group’s quarterly results and surpassing its prior record of 1.59 trillion won achieved in the third quarter of 2022.
A major contributor to this financial growth was Shinhan Securities, which saw its net profit soar by an impressive 167 percent to 288.4 billion won. This significant increase was largely attributed to stronger performance in the equity markets.
Overall, the group’s non-interest income experienced a substantial rise of 26.5 percent, reaching 1.19 trillion won. This growth was robustly supported by broad-based increases in fee income and significant securities-related gains. Concurrently, interest income also saw a healthy increase of 5.9 percent, totaling 3.02 trillion won.
Shinhan Bank, recognized as the group’s flagship unit, likewise achieved a record quarterly net profit, reaching 1.16 trillion won. This represented a 2.6 percent increase year-on-year, primarily propelled by stronger interest income derived from substantial corporate lending growth.
Further demonstrating diversified growth, profit from Shinhan’s overseas operations expanded by 4.9 percent, totaling 221.9 billion won. Notably, Vietnam emerged as the largest contributor, accounting for 58.1 billion won of this international profit.
Beyond financial performance, Shinhan Financial Group also unveiled an upgraded shareholder return plan. This strategic move follows the group’s success in exceeding its previous 50 percent payout target ahead of schedule last year, underscoring its commitment to shareholder value.
The new framework specifically links Shinhan’s shareholder return ratio to a sophisticated formula that considers both return on equity (ROE) and overall growth. The group has set an ambitious target of a 10 percent ROE, with annual reviews by the board to ensure alignment and effectiveness. Illustratively, achieving 4 percent to 5 percent growth in conjunction with a 10 percent ROE would imply a significant shareholder return ratio ranging from 50 percent to 60 percent under this new structure.
As of the end of March, Shinhan Financial maintained a strong common equity Tier 1 (CET1) ratio of 13.19 percent, indicating robust capital adequacy. For the previous year, the group’s return on equity (ROE) was reported at 9.1 percent, reflecting solid profitability.
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