Shinhan Financial Group (055550) Q1 2026 earnings summary

Executive summary

• Q1 2026 net income attributable to controlling interests was KRW 1,622.6 billion, up 9.0% year-on-year, driven by strong non-interest income and improved profitability metrics.

• ROE reached 11.9% and ROTCE 13.4%, both up 0.5 percentage points year-on-year, reflecting enhanced core earnings.

• CET1 ratio remained stable at 13.19%, despite RWA growth and shareholder returns.

• Shareholder return policy emphasized sustainable and projectable returns, with a Q1 2026 dividend of KRW 740–741 per share and a KRW 700 billion share buyback program, with immediate retirement of repurchased shares.

• Achieved 50%+ shareholder return target ahead of schedule, reflecting strong execution of the value-up plan.

Financial highlights

• Q1 2026 consolidated net income: KRW 1,622.6–1,649.1 billion; net interest income up 5.9% YoY; non-interest income surged 26.5% YoY, led by fee and commission growth.

• Cost-to-income ratio improved to 36.7% (down 0.6% YoY), despite a 9.3%–10.4% rise in SG&A expenses.

• Credit cost ratio increased by 5 basis points YoY to 46 basis points; credit loss provisions rose 17.5% YoY.

• NPL ratio increased to 0.81%–0.83%, while NPL coverage ratio declined to 110%–113.6%.

• Total assets as of March 31, 2026: KRW 816.7 trillion; total equity: KRW 61.5 trillion.

Outlook and guidance

• Targeting ROE of 10%–12% through 2028, with a shareholder return ratio of 50%+ and CET1 ratio of 13%+.

• DPS expected to grow by more than 10% annually over the next three years; full-year credit cost ratio targeted in the mid-40 basis points range.

• Board-led annual gap analysis to provide 3-year guidance, with flexibility to adjust based on market and regulatory conditions.

• Share buybacks and dividend increases to continue, aiming to reduce total shares to 450 million by end-2027.

• Focus on digital transformation, ESG initiatives, and global expansion.