Shinhan Financial Group Co Ltd. (NYSE: SHG) has issued its 1H 2021 financial results and business highlights. The company achieved a record 1H 2021 net income attributed to the improvement of the company's fundamentals.
Shinhan’ Financial Group’s bank net income up 20% in 1H 2021
There was strong growth in earnings across the company’s business lines which show strong fundamentals. Bank net income was up 20% YoY due to quality asset growth and margin management, while non-banking operations recorded 68% YoY improvement. Notably, the company improved earnings because of exceptional ROE subsidiaries. For instance, capital markets operations posted KRW507.4 billion, accounting for 43% of the company's non-banking income.
The company is well prepared for the end of pandemic financial support programs. With more financial support following the pandemic, the Group has seen high loan growth since 2020, and its 1H 2021 provision for credit losses dropped 56% YoY and 9% Q0Q. In addition, without considering the COVID-19 provision given in 1H 2020 and the allowance for problematic investment items, the credit losses dropped 30% YoY.
The company's Banks interest, principal balance deferment, and COVID-19 support program recorded KRW152.4 billion following an increase until the end of last year and 1H 2021 and decreased below the end of June 2020. Most importantly, the company is always keen on taking an active stance to do away with some uncertainties should events that include products related investment issues arise.
Shinhan’s ROE increased 11.5%
Shinhan Financial Group is committed to create sustainable profits and establish predictable capital policies by efficiently allocating capital. The ROE of 11.5% reported comes at the back of a high 1H net income. Through efficient growth management and the company's RWA, Shinhan increased its ROE, and it is creating a sustainable profit. In Q2 2021, the company saw RWA increase to KRW2.2 trillion, which was managed at a lower level than half of the KRW4.8 trillion, the increased amount in Q1.
The company managed a net income of KRW2.4438 trillion in 1H 2021 despite uncertainties, including COVID-19. Q2 net income was KRW1.2518 trillion which is a record high in the history of the company.