Shinhan Financial Group is on course to achieve its 10 percent return on equity target a year ahead of schedule, after posting double-digit profit growth in the first nine months of 2026.
The banking group reported Tuesday that cumulative net profit rose 12.7 percent year-on-year to 5.03 trillion won ($3.8 billion), driven by stronger interest and fee income.
Return on equity reached 11.9 percent at the end of September, up about 0.9 percentage point from a year earlier and above the group's 10 percent target for 2027.
Net interest income increased 7.9 percent to 9.35 trillion won in the January-September period, supported by asset growth and an improvement in net interest margin. Non-interest income climbed 8.2 percent to 3.43 trillion won, while credit costs remained stable.
Quarterly earnings, however, weakened as slower stock trading and rising interest rates weighed on non-interest income.
Third-quarter net profit fell 12.9 percent from the previous quarter to 1.58 trillion won. Non-interest income plunged 45.5 percent quarter-on-quarter, reflecting lower brokerage fees and reduced securities-related gains, while net interest income remained broadly stable.
Shinhan Financial said it would seek to strengthen its nonbanking earnings through its recent acquisition of an insurer, with a focus on improving profitability over the longer term.
"We are seeing progress toward our 10 percent ROE target," said Jang Jeong-hun, the group's chief financial officer.
"We will continue to pursue sustainable growth through profitability-focused portfolio management and efficient capital allocation," he said, adding that the acquisition and normalization of the insurance business would help strengthen Shinhan's earnings base.
The group also reaffirmed its shareholder return plans, with its board approving a third-quarter dividend of 740 won per share and a 450 billion won share buyback.
Of the buyback, 200 billion won is scheduled for the fourth quarter of 2026, and the remaining 250 billion won for January 2027. Each portion will be counted toward shareholder returns in the respective year.
Total shareholder returns for 2026 are projected at approximately 3 trillion won, including 1.4 trillion won in cash dividends and 1.6 trillion won in share buybacks and cancellations.
Shinhan's common equity Tier 1 capital ratio, a key measure of financial strength, stood at 13.62 percent at the end of September, up 0.12 percentage point from the previous quarter.
ch0221@heraldcorp.com