Shinhan’s net profit shoots up 90.9% in Q1

Last Thursday, Shinhan Financial Group revealed that the company’s net profit in the first quarter reached 771.4 billion won ($675.2 million), up 90.9 percent from the previous quarter’s 404 billion won and 30.3 percent from the 592.1 billion won recorded over the same period last year.

In a statement, the group highlighted that its net interest margin, which had steadily declined since rate cuts in August 2014, has rebounded for the first time in two years, boosting interest profit by 5 percent.

Shinhan’s nonbanking affiliates also minimized losses amid tough business conditions involving lower credit card processing fees and a drop in trade volume throughout the stock market.

Shinhan’s net income for the first quarter included corporate tax revenue of around 210 billion won, as it benefitted from the tax deduction effects of unused deficits carried forward by Shinhan Bank and Shinhan Life Insurance under commercial law.

According to the group, its quarterly performance demonstrates the different ways in which the group is able to generate profits, the stability of those profits through the division of labor between its banking and nonbanking sectors, and its maintenance of bad debt through consistent risk management.

In the January-to-March quarter, Shinhan Bank’s net profit saw year-on-year growth of 47.5 percent. This was a 142.7 percent surge from that of the previous quarter. Its net interest margin rose by two basis points to 1.48 percent during the same period.

Shinhan Card, the group’s credit card unit, posted a net profit of 148.8 billion won, down 3.69 percent from the same period last year and 14.1 percent from the previous quarter. However, its pretax profit rose by 1.4 percent.

Shinhan Life saw its net profit for the quarter hit 58.7 billion won, nearly quadruple that of the previous quarter and up 81.9 percent from the same period last year, not including corporate tax revenue.

BY PARK HYE-MI [park.hyemi@joongang.co.kr]