Stellar H1 Performance
Shinhan Financial Group hikes H1 earnings 25 pct
Shinhan Financial Group, the nation's leading financial services group, said its net profit rose 24.9 percent in the first half from a year earlier, helped by boosts in earnings by its affiliates.
Income in the April-June period reached 595.7 billion won, up 25.1 percent compared with 476.4 billion won in the preceding quarter, the group said, adding that the figures exceeded market expectations substantially.
Stellar earnings reports from its affiliates, including Goodmorning Shinhan Securities Co., Shinhan Capital and Shinhan Bank helped to boost the group? record H1 gains. Shinhan Bank, which took over Chohung Bank, posted 948.4 billion won in net profit, Goodmorning Shinhan Securities 61.2 billion won, Shinhan Life 60.7 billion won, Shinhan Card 120.1 billion won, and Shinhan Capital 29.3 billion won, with incomes of the group? non-banking affiliates coming to 277.3 billion won.
Group officials said stable net interest margin and the growth of loans led to a rise in interest earnings, increases in non-interest earnings through expanded banking network, which caused sales of funds to rise and continuous reductions in loss provisions have contributed to large combined earnings. The share of non-banking sector in the group? total earnings came to 22.5 percent in the H1 from 11 percent at the end of last year due to the shake up of the group? business portfolio since 2001 when the group was officially launched Shinhan Financial Holdings as its mother company.
The group? total assets amounted to 207 trillion won at the end of June, up 7 percent from the end of last year. ROA recorded 1.31 percent and ROE 21.89 percent.
Shinhan Bank recorded interest earnings up 10.1 percent from the same period last year and non-interest earnings up 21 percent with a 47.8 percent reduction in loan loss provisions owing to the growing soundness of its assets and normalization of borrowers operations through restructuring. Non-financial business income rose 199.6 percent in the Q2 due to the sale of the stake in Hynix Semiconductor amounting to 83.9 billion won. Shinhan Bank? loan assets increased 3.3 trillion won up 4 percent from the same period last year. The group acquired Chohung Bank in 2003 for 3.3 trillion won.
Shinhan Bank, which had a new start after acquiring Chohung Bank, on April 1, is expected to bring a fresh change in the nation? banking environment, especially with Kookmin Bank in the process of acquiring Korea Exchange Bank. The new Shinhan Bank has its total assets increased to 163 trillion won, second only to Kookmin Bank with 197 trillion won in total assets. The country will have four major commercial banks if Kookmin Bank succeeds in taking over the KEB as planned: Kookmin, Shinhan, Woori, and Hana banks.
The bank will continue to be a key affiliate of the Shinhan Financial Group as it has since its establishment as an integrated financial group in 2001. The financial group has been working for the growth of synergy between its banking and non-banking affiliates by marketing the products of non-banking through the bank? expansive network, including credit card, securities, insurance, and trust.
The group has been named as priority bidder for acquiring the LG Card Co. to become a top credit card operator in the country when the takeover is completed. The group will build up its image as the top financial group in the country as well as securing new income sources through the economy of scale in the credit card sector with the addition of LG Card and achieve synergistic effect with the diversified customer base. The group wrote in 6. 7 trillion won to win the bidding, reports said.
The new Shinhan Bank? vision is to become the bank of pride for all those concerned including customers, officers and staff of the bank, and all the people in the country. It aims to be an enterprise that gives pride and dignity to industry and the country. It also means that the bank will position itself in the minds of the people so that they would think about Shinhan when they talk about banks. It also would like to be a top representative bank for the country.
The new Shinhan? payroll list expanded to 13,700 including contract employees with its branches and depositary outlets numbering 962, in addition to l16 overseas branches and subsidiaries. bank? non-performing asset ratio reached 1.05 percent.
Chairman Ra Eung-chan of the financial group congratulated all officers and staff of the new Shinhan for their hard work during the past 2 and half years to prepare for the integration of the two banks since the acquisition was announced. At the ceremony marking the opening of the new Shinhan Bank held on
April 1, he said the new Shinhan is a giant bank with the number of its customers totaling over 16 million, and in the scale of asset, branch network, and the number of employees. nw
President Lee In-ho of the Shinhan Financial Group.