Shinhan Financial Group's net profit for the first nine months of the year topped 5 trillion won for the first time, lifted by wider net interest margins amid rising rates and higher fee income from a strong stock market in the first half.
Net profit for the January-September period rose 12.7% from a year earlier to 5.03 trillion won ($3.5 billion), the group said on the 27th.
The figure surpassed the group's full-year 2024 net profit of 4.97 trillion won in just nine months. Shinhan Bank's cumulative net interest margin stood at 1.59%, up 0.04 percentage point from a year earlier. Group interest income rose 7.9% to 9.35 trillion won.
Growth in brokerage and financial product sales fees also supported earnings. Securities brokerage fees jumped 138.8% in the first three quarters from a year earlier, while fees from funds, bancassurance and trusts climbed 69.4%. Total fee income rose 35.4%, pushing cumulative non-interest income up 8.2% to 3.43 trillion won.
Cumulative non-operating income, which reflected gains from building sales at the banking and card units, reached 310.8 billion won, up 195.6 billion won from a year earlier.
Third-quarter net profit alone, however, fell 12.9% from the previous quarter to 1.58 trillion won. Non-interest income dropped 45.5% as securities trading volume slowed and investment returns deteriorated on rising rates. The bank's quarterly net interest margin also slipped 0.03 percentage point from the previous quarter to 1.58%.
Shinhan Financial said it expects to reach the target of a return on equity above 10% by the end of this year, ahead of the 2027 goal set out in its value-up plan. ROE through the third quarter was 11.9% on an annualized basis, up about 0.9 percentage point from a year earlier.
Total shareholder returns planned for this year amount to a record of about 3 trillion won, combining an estimated 1.4 trillion won in cash dividends with 1.6 trillion won in share buybacks and cancellations. That is about 20% more than last year. The common equity Tier 1 ratio stood at 13.62% at the end of September, up 0.12 percentage point from the previous quarter.