SEOUL– Shinhan Financial Group Co., a major South Korean financial holding firm, on Friday reported record quarterly earnings in the first quarter as interest income rose following the central bank’s rate hikes.
Net profit came to 1.42 trillion won (US$1.1 billion) in the January-March period, up 16.6 percent from a year earlier, the group said in a regulatory filing. From three months earlier, net income jumped 199 percent.
Operating income rose 13.3 percent on-year to 1.9 trillion won and revenue fell 2.7 percent to 13.96 trillion won.
The earnings exceeded market expectations. The average estimate of net profit by analysts stood at 1.21 trillion won, according to the survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
The group said interest income increased in line with rising market rates and solid earnings in its banking and credit card units.
Shinhan Financial’s interest income gained 17.4 percent on-year to 2.49 trillion won on the back of lending growth.
In April, the Bank of Korea (BOK) raised its policy rate by a quarter percentage point to 1.5 percent, the fourth rate increase since August last year, including the January hike, to tame inflation and curb high household debt.
Shinhan Bank, the banking unit of the group, saw its first-quarter net profit rise 31.5 percent on-year to 863.1 billion won. Shinhan Card reported a 4.7 percent on-year gain to 175.9 billion won in net profit.
The group’s net interest margin (NIM), a gauge of profitability, came to 1.89 percent in the first quarter, up 6 basis points from three months earlier. The bank’s NIM also rose 6 basis points on-year to 1.51 percent.
The group said it has decided to provide 400 won per each common share in dividends.
Source: Yonhap News Agency