Shinhan Financial Group (055550) Q4 2024 earnings summary

Executive summary

• FY2024 net income rose 3.4% year-over-year to KRW 4,517.5bn, driven by higher interest income and reduced credit loss provisioning.

• Operating income before expenses increased 2.9% year-over-year, with cost-to-income ratio stable at 41.7%.

• Group CET1 ratio remained robust at 13.03% despite increased shareholder returns and market volatility.

• Overseas business net income surged 38.1% year-over-year, with Shinhan Bank Vietnam and Japan showing strong ROE.

Financial highlights

• Interest income grew 5.4% year-over-year, supported by 7.3% growth in interest-bearing assets and 10.3% YTD KRW loan growth at Shinhan Bank.

• Non-interest income declined 5.0% year-over-year due to securities losses and lower insurance gains, despite a 2.6% rise in fee income.

• Provision for credit losses dropped 11.4% year-over-year, with group credit cost ratio improving by 10bp to 0.47%.

• G&A expenses rose 3.7% year-over-year, mainly from ERP expansion, but CIR remained stable.

• Year-end dividend proposed at KRW 540 per share, with total 2024 shareholder return ratio at 39.6%.

Outlook and guidance

• 2025 GDP growth expected in mid-1% range; three BOK rate cuts anticipated, with NIM contraction likely.

• Asset growth to be limited by weakened loan demand; focus on profitability and capital efficiency in RWA allocation.

• Shareholder return ratio projected at 40–44% for 2025, with quarterly and year-end dividends evenly distributed.