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01/11 03:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary presents mixed signals: stable NIM and credit costs are positive, but noninterest income and insurance profits declined. The Q&A reveals cautious optimism with plans for loan growth and shareholder returns, but uncertainties persist in asset quality and dividend policy. The lack of decisive guidance and management's vague responses contribute to a neutral sentiment, suggesting limited stock movement.
CET1 ratio 13.56%, stable level due to RWA management and robust profit generation despite won depreciation and loan asset growth.
Net income (Q3 2025) KRW 1.4235 trillion, despite a decrease in securities-related profits. Credit costs were well controlled.
Credit cost ratio 46 bp, up 2 basis points year-on-year, but improved quarter-on-quarter.
RWA (Risk-Weighted Assets) Increased by KRW 8 trillion quarter-on-quarter, driven by foreign currency-denominated RWA growth due to won depreciation and loan-driven asset growth.
Net income (Q3 quarter-on-quarter) 8.1% decline, due to a decrease in securities-related profits reflecting market rate movements.
ROE and ROTCE Increased by 0.7 percentage points year-on-year to 11.1% and 12.5%, respectively.
Group interest income Rose by 2.9% quarter-on-quarter, driven by profitability-based asset growth and active margin control.
Bank's loan in won Increased by 2.7% quarter-on-quarter, with retail sector growing by 3.1% and corporate segment by 2.3%.
Bank's NIM (Net Interest Margin) Rose to 1.56%, up 1 bp quarter-on-quarter, due to improved funding cost offsetting a fall in interest-bearing asset yield.
Noninterest income Decreased quarter-on-quarter due to market conditions, with declines in securities, FX, and derivatives gains, but brokerage fees and IB-related fees surged.
Insurance-related profits Decreased by 2.4% quarter-on-quarter, but profitability remained stable due to scaled-up CSM management.
Group's SG&A expense Increased by 2.2% quarter-on-quarter due to voluntary retirement costs at Shinhan Card, but CIR remained stable at 37.3%.
Credit cost Decreased by 30.1% quarter-on-quarter, reflecting expiration of corporate credit rating impacts and reduced provisions from real estate PF workout plan.
Group's NPL coverage ratio Declined by 2.9 percentage points quarter-on-quarter due to increased substandard and below loans in the nonbank sector, but the bank's NPL coverage ratio improved by 12.17 percentage points.
Delinquency ratio Gradually improving at both the bank and card levels.
Shinhan Bank earnings Declined slightly quarter-on-quarter due to noninterest income factors, including marketable securities.
Shinhan Card earnings Increased quarter-on-quarter despite decreased merchant fee income and voluntary retirement costs, supported by reduced credit cost.
Shinhan Securities earnings Decreased quarter-on-quarter due to lower product management income, but structural earnings capacity improved year-on-year.
Shinhan Capital performance Subdued due to pressure on funding and credit cost.
Overseas services Delivered differentiated results in Q3, particularly in Japan and Vietnam, despite domestic and global uncertainties.
Digital initiatives: The group has summarized its performance in digital initiatives, indicating progress in execution and outcomes.
Overseas services: Differentiated results were delivered in Japan and Vietnam despite ongoing domestic and global uncertainties.
CET1 ratio: Maintained at 13.56%, reflecting stable financial soundness and robust profit generation despite challenges like won depreciation and loan asset growth.
Net income: Group's Q3 net income was KRW 1.4235 trillion, an 8.1% decline Q-o-Q, but credit costs were well controlled.
Interest income: Increased by 2.9% Q-o-Q due to profitability-based asset growth and active margin control.
Credit cost: Decreased by 30.1% Q-o-Q, reflecting improved asset quality and reduced provisions for real estate PF workout plans.
SG&A expenses: Increased by 2.2% Q-o-Q due to voluntary retirement costs at Shinhan Card, but CIR remained stable at 37.3%.
Shareholder return policy: Board resolved on a cash dividend of KRW 570 per share for Q3, with a total shareholder return of KRW 2.35 trillion expected in 2025, including share buybacks.
Corporate value enhancement: ROE and ROTCE rose by 0.7 percentage points Y-o-Y to 11.1% and 12.5%, respectively, as part of the corporate value enhancement plan.
Macroeconomic and Domestic Economic Uncertainties: Uncertainties in the macro environment and domestic economy could impact asset quality and financial performance.
RWA Growth and Capital Adequacy: Risk-weighted assets (RWA) increased by KRW 8 trillion Q-o-Q due to won depreciation and loan-driven asset growth, posing challenges to maintaining a stable capital adequacy ratio.
Decline in Noninterest Income: Noninterest income decreased Q-o-Q due to market conditions, including declines in securities, FX, and derivatives gains.
Credit Risk Among Corporates: Credit risk has risen among corporates due to delayed economic recovery, requiring more prudent asset quality management.
Challenges in Vulnerable Customer Segments: Vulnerable customer segments face persistent challenges, necessitating timely funding and asset quality management.
NPL Coverage Ratio Decline: Group's NPL coverage ratio declined by 2.9 percentage points Q-o-Q due to an increase in substandard and below loans in the nonbank sector.
Shinhan Capital Performance Pressure: Shinhan Capital faced pressure on funding and credit costs, leading to subdued performance.
Korean Financial Industry Transformation: The Korean financial industry faces challenges in achieving a productive financial transformation to support economic recovery and sustainable growth.
Shareholder Return Policy: The shareholder return policy is expected to remain unchanged in the foreseeable future given the stable CET1 ratio and financial soundness.
Capital Adequacy: The group will focus on maintaining a stable capital adequacy ratio by supplying sufficient funds where and when needed, while improving internal efficiency and strategic resource allocation.
Asset Quality Management: Credit risk among corporates has risen due to delayed economic recovery and challenges among vulnerable customer segments. More prudent asset quality management will be needed.
Specialty Credit Subsidiaries: Specialty credit subsidiaries, including card and capital, are steadily improving fundamentals through asset rebalancing and various self-help measures and are expected to gradually recover profitability.
Overseas Business Performance: Overseas services delivered differentiated results in Q3, particularly in Japan and Vietnam, despite ongoing domestic and global uncertainties.
Corporate Finance and Economic Recovery: Shinhan Financial Group will continue its consistent approach of allocating resources to corporate finance while providing timely and efficient funding to support Korea's economic recovery and sustainable growth.
Cash Dividend: KRW 570 per share for the third quarter
Total Cash Dividend for 2025: KRW 1.1 trillion
Share Buyback: KRW 1.25 trillion for 2025
The earnings call summary presents mixed signals: stable NIM and credit costs are positive, but noninterest income and insurance profits declined. The Q&A reveals cautious optimism with plans for loan growth and shareholder returns, but uncertainties persist in asset quality and dividend policy. The lack of decisive guidance and management's vague responses contribute to a neutral sentiment, suggesting limited stock movement.
The earnings call summary indicates mixed results: strong brokerage commissions and trust fee income but sluggish credit card fee income and increased credit costs. The Q&A reflects cautious optimism with some uncertainties, particularly in regulatory impacts and stablecoin plans. Shareholder returns and capital management remain stable, and there's a proactive approach to loan growth. However, management's vague responses on certain issues suggest underlying uncertainties. Given these factors, a neutral sentiment is appropriate, as positive and negative elements are fairly balanced.
The earnings call presents a mixed picture. While there are positive aspects like an increase in interest income and shareholder return plans, there are also significant concerns such as declining non-interest income, increased competition, and unclear management responses in the Q&A. The optimistic guidance on credit costs and share buyback plans are offset by declining NIM and asset quality vigilance. These mixed signals suggest a neutral market reaction, with neither strong positive nor negative sentiment expected.
The earnings call summary shows mixed financial performance with positive growth in interest and noninterest income, but challenges in securities income and NIM stability. The Q&A highlights management's cautious approach, with uncertainties in real estate exposure and shareholder return timelines. Despite positive global business growth, the lack of clear guidance on margins and shareholder returns tempers optimism. Overall, the mixed results and management's cautious stance suggest a neutral stock price reaction over the next two weeks.
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