Shinhan Financial Group (055550) Q1 2026 earnings summary

Executive summary

• Launched Shinhan Value Up 3.0 Plus, focusing on sustainable value creation, predictable shareholder returns, and organic alignment of growth and returns.

• Achieved 50% shareholder return target ahead of schedule and improved PBR, reflecting strong execution.

• 1Q26 net income rose 9.0% YoY to KRW 1.6tn, driven by strong non-interest income growth and improved profitability metrics.

• ROE reached 11.9% and ROTCE 13.4%, both up 0.5% YoY, reflecting enhanced core earnings.

• CET1 ratio remained stable at 13.19%, despite a 16bp decline from end-2025, supported by solid capital generation.

Financial highlights

• Q1 2026 net income reached KRW 1,622.6 billion, up 9% year-on-year, driven by non-interest income growth.

• Net interest income increased 5.9% YoY, while non-interest income surged 26.5% YoY, led by fee and commission growth.

• Operating profit before expense rose 11% year-on-year; net interest income up 5.9% year-on-year.

• Cost-to-income ratio (CIR) improved to 36.7% (down 0.6% YoY), and credit cost ratio (CCR) rose 5bp YoY to 46bp.

• Group total assets grew 3.9% YTD to KRW 816.7tn, with loans up 2.9% and deposits up 3.2%.

Outlook and guidance

• DPS to grow by more than 10% annually for the next three years; allocation between dividends and buybacks to follow a rational framework.

• TSR expected in the 50%-60% range over the next few years, with formula application and guidance updates likely in Q4.

• ROE target set at 10%+ (management range 10–12%), with a shareholder return ratio of 50%+ and stable CET1 ratio guidance of 13.0–13.4%.

• 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.