Shinhan's quarterly revenue nearly doubles as net income rises 10.8 percent

Shinhan Financial Group said its third-quarter revenue nearly doubled from a year earlier to 18.6 trillion won ($13.9 billion), while net income rose 10.8 percent to 1.61 trillion won ($1.2 billion) even as operating profit edged down 2.4 percent to 1.91 trillion won ($1.42 billion).

Chief Financial Officer Chang Jung-hoon attributed the operating-profit decline to a 13.2 percent quarter-on-quarter fall in pre-provision operating profit, saying it came "despite solid interest income" as non-interest income contracted, according to a statement on the group's website. Net income fell 12.9 percent from the preceding quarter, a drop the CFO tied to the lower pre-provision result even with an office-building sale gain and well-managed costs.

Non-interest income dropped 45.5 percent from the second quarter. Fee income fell 27.7 percent, and securities-related gains shrank sharply on bond valuation losses.

Interest income held up, rising 1.8 percent from the previous quarter. Average loan balances grew and bond interest revenue expanded even as the bank's net interest margin narrowed 3 basis points, and Shinhan Bank's won-denominated loans increased 1.4 percent from the prior quarter.

The group's return on equity came in at 11.94 percent and return on tangible common equity at 13.39 percent, each 0.9 percentage point better than a year earlier.

Among affiliates, Shinhan Bank's earnings fell 5.9 percent from the previous quarter, while Shinhan Card improved 68.4 percent on the office-building sale gain. Shinhan Capital declined 29.7 percent and Shinhan Life 31.3 percent, and the securities and asset management units slowed as capital markets cooled.

Shinhan also decided to buy about 77 percent of Lotte Insurance for 693 billion won ($517 million), funding the purchase by reallocating capital the group already holds rather than raising outside money, a move estimated to reduce its CET1 ratio by 19 basis points. Chang said the deal is meant to strengthen the group's insurance portfolio and lift medium- to long-term profitability and capital efficiency by putting existing capital to work.

The board approved the acquisition of 450 billion won ($336 million) of treasury shares, with 200 billion won ($149 million) to be bought within the year and 250 billion won ($186 million) in January, along with a quarterly dividend of 740 won per share. Shinhan has bought back 1.6 trillion won ($1.19 billion) of its own stock in 2026, up 28.0 percent from a year earlier, and expects an annual dividend per share of 2,960 won, up 14.3 percent on the year.