1. What Happened? : H1 2025 Performance Analysis
Shinhan Financial Group posted KRW 3.0374 trillion in net income for H1 2025, a robust 10.6% YoY growth. Steady interest income from the banking division and increased non-interest income from the securities division were key drivers. However, the card and capital divisions experienced declines of 35.0% and 44.1% respectively, posing potential concerns.
2. Why Did It Happen? : Drivers of Performance
- Banking/Securities Strength: Stable interest income and increased IB/capital market fees
- Card/Capital Weakness: Rising procurement costs, increased loan loss provisions, heightened market volatility
3. What’s Next? : Outlook and Investment Strategies
Global economic slowdown and sustained high interest rates remain threats. However, the Korean economic recovery and potential interest rate cuts offer positive counterpoints. Shinhan’s focus on digital transformation and new business investments suggests a positive long-term outlook. Maintaining investment in core businesses (banking/securities) while monitoring card/capital divisions and adjusting investment accordingly is advisable. Factor in shareholder return policies, ESG performance, and the company’s ability to navigate macroeconomic variables for a comprehensive investment strategy.
4. What Should Investors Do? : Action Plan
- Maintain a Long-Term Perspective: Focus on the stable growth of core businesses
- Manage Risk Diligently: Monitor card/capital division performance and macroeconomic factors.
- Develop Proactive Investment Strategies: Leverage shareholder return policies and consider ESG performance.