[라이센스뉴스 정재혁 기자] Shinhan Financial Group achieved record-high performance last year despite losses related to financial investment products such as Lime Fund.
Shinhan Financial Group (Chairman Yong-byeong Cho) announced on the 5th that it recorded a net profit of 3,4146 billion won last year. This is an increase of 0.3% (11.1 billion won) from the previous year (3,403.5 billion won).
Net profit in the fourth quarter of last year was 4644 billion won, down 59.4% from the previous quarter (1,144.7 billion won). One-time expenses due to the loss of investment products such as Lime Fund (2675 billion won) and additional provisions related to Corona 19 (1873 billion won) were reflected.
The group’s interest income last year was 8.15 trillion won, up 1.9% (154 billion won) from the previous year. Bank and non-bank interest income increased by 1.0% and 4.6%, respectively.
Non-interest income recorded 3.37 trillion won, an increase of 7.9% year-on-year. In particular, commission income increased by 11.3% year-on-year, which was largely influenced by an increase in securities commission fees (125.0%) and lease financing fees (72.6%) due to an increase in domestic stock trading value.
The group’s sales and management expenses increased by 1.5% (78 billion won) year-on-year to 5.213 trillion won, but the operating income expense ratio (CIR), an indicator of management efficiency, fell 0.9 percentage points (p) year-on-year to 45.2%.
The amount of provision for loan loss increased by 46.3% (439.8 billion won) from the previous year to 1.391 trillion won. It has accumulated a total of 3944 billion won in the corona-related provision alone. As a result, the credit cost ratio rose 9bp (1bp=0.01%) from the previous year to 0.41%, while the credit cost ratio excluding the corona provision was 0.29%, which was a 1bp decrease from the previous year.
As of the end of last year, the group’s total assets (836 trillion won) increased 9.3% (71 trillion won) from the end of 2019 (765 trillion 100 billion won) due to the increase in loan receivables.
Shinhan Bank’s earnings by subsidiary recorded 2,77 trillion won, down 10.8% (251.4 billion won) from the previous year. Net interest income increased by 1% from the previous year to 6,797.8 billion won, but the amount of provision for bad debts surged 93.6% from 3513 billion won to 6802 billion won, which ate profits.
Shinhan Investment Corp. recorded a net profit of 154.8 billion won last year, down 29.9% (661 billion won) from the previous year. Thanks to the increase in stock trading, commission income (76.4 billion won) increased by 45.6%, but bad debt expenses, which were rarely in 2019, occurred at 105.8 billion won due to losses related to Lime Fund.
In addition, by subsidiary, Shinhan Card achieved a net profit of 606.5 billion won ▲ Shinhan Life 1778 billion won and Orange Life 2793 billion won.
An official from Shinhan Financial said, “The banking division has secured a foundation for sustainable growth through solid asset growth that has continued since the beginning of the year despite the decline in NIM due to market interest rates.” It played a pivotal role in improving the group’s performance by promoting the portfolio strategy.”
On the other hand, Shinhan Finance delayed the 2020 dividend payout ratio and dividend per share at the board of directors held prior to the announcement of its earnings. The financial authorities last month recommended a’dividend payout ratio within 20%’ to banks and financial holding companies.