Financial Performance - Total assets increased to W 727,679,883 million as of June 30, 2024, up from W 691,795,333 million at December 31, 2023, representing a growth of approximately 5.2%[11] - Loans at amortized cost rose to W 434,524,032 million, an increase of 5.5% from W 411,739,562 million at the end of 2023[11] - Deposits grew to W 402,755,997 million, reflecting an increase of 5.5% compared to W 381,512,664 million at December 31, 2023[11] - Total liabilities increased to W 670,077,603 million, compared to W 635,473,468 million at the end of 2023, marking a rise of approximately 5.4%[11] - Total equity attributable to equity holders of Shinhan Financial Group Co., Ltd. was W 54,837,263 million, up from W 53,720,537 million, reflecting an increase of 2.1%[11] - Profit for the period for the six months ended June 30, 2024, was W 2,798,815 million, compared to W 2,683,123 million in 2023, indicating an increase of 4.3%[12] - Total comprehensive income for the six-month period was W 1,900,968 million, down from W 3,402,364 million in the same period of 2023, a decrease of 44.1%[13] - Basic and diluted earnings per share for the six-month period were W 5,219, compared to W 4,847 in 2023, representing an increase of 7.7%[13] Income and Expenses - Total interest income for the six-month period ended June 30, 2024, was W 14,435,457 million, an increase from W 13,307,663 million in the same period of 2023, representing a growth of 8.5%[12] - Net interest income for the six-month period increased to W 5,637,713 million, up from W 5,268,025 million in 2023, reflecting a growth of 7%[12] - Net insurance income for the six-month period was W 560,715 million, an increase from W 497,576 million in 2023, reflecting a growth of 12.7%[12] - Fees and commission income for the six-month period rose to W 2,186,078 million, up from W 1,995,691 million in 2023, a growth of 9.5%[12] - Operating income for the six-month period was W 3,920,779 million, compared to W 3,492,233 million in 2023, reflecting an increase of 12.3%[12] Assets and Liabilities - The company reported a significant increase in derivative assets, which rose to W 6,317,567 million from W 4,711,421 million, marking a growth of 34%[11] - Financial assets at fair value through profit or loss reached W 74,487,460 million, up from W 71,216,564 million, indicating a growth of 3.2%[11] - The total capital stock of Shinhan Financial Group is W 1,461,721 million, with shares listed on the Korea Exchange since September 10, 2001[20] - The total financial liabilities amount to W 593,482,380 million, with the largest component being deposits at W 391,266,817 million[114] - The total amount of borrowings is W 60,320,524 million, with W 19,310,777 million due in less than 1 month[114] Credit Risk Management - The Group manages various financial risks including credit risk, market risk, interest rate risk, and liquidity risk, with a focus on maintaining appropriate risk levels[37] - The Group's credit risk management encompasses all areas of credit, including on-balance-sheet and off-balance-sheet transactions, with a significant emphasis on potential economic loss[48] - Credit risk evaluation includes a comprehensive assessment of both retail and corporate customers, utilizing internal and external data to inform credit ratings[50] - The total allowance for credit losses as of June 30, 2024, is W 4,454,693 million, reflecting the Group's proactive risk management strategy[79] - The Group recognizes lifetime expected credit losses for exposures subject to debt restructuring, indicating a significant increase in credit risk[63] Market Risk Management - The market risk management framework includes setting VaR limits and daily monitoring by the risk management department, independent of the operating department[89] - The Group adheres to Basel 3 standards for market risk management, reflecting regulatory requirements in its risk calculation methods[92] - Shinhan Financial Group manages market risk through a daily Value at Risk (VaR) measurement with a 99.9% confidence level, ensuring consistent risk management across the group[94] - Stress tests are conducted to manage potential losses from rapid economic changes, supplementing statistical risk measurement methods[91] Liquidity Management - The Group's liquidity risk management includes monitoring indices such as the 'limit management index' and 'early warning index' to preemptively address potential liquidity issues[108] - Following the bankruptcy of Silicon Valley Bank, the Group has strengthened its liquidity crisis response capabilities by analyzing bank run scenarios[107] - Shinhan Card maintains a liquidity level that can withstand a 3-month credit crunch, demonstrating proactive liquidity risk management[109] Derivative Instruments - The total notional amounts of outstanding derivatives reached W 427,561,808 million, an increase from W 367,022,470 million as of December 31, 2023, representing a growth of approximately 16.5%[183] - The total gain or loss on valuation of derivatives for the six-month period ended June 30, 2024, was a net loss of W 90,915 million, contrasting with a net gain of W 66,441 million in the same period of 2023[185] - The total fair value of commodity related derivatives as of June 30, 2024, was W 179,986 million in liabilities, down from W 549,683 million on December 31, 2023[184] Investment and Securities - The total amount of securities at fair value through profit or loss is W 73,001,216 million as of June 30, 2024[162] - The total value of securities at fair value through other comprehensive income (FVOCI) as of June 30, 2024, is 88,821,773 million won, a decrease from 90,311,979 million won as of December 31, 2023[189] - The ending balance of debt securities at FVOCI is 87,074,207 million won, reflecting a decrease of 1,562,793 million won during the six-month period ended June 30, 2024[191]

Core Viewpoint - Value investing remains a preferred strategy for identifying strong stocks, focusing on traditional valuation metrics to find undervalued stocks with profit potential [2][3] Company Summary - Shinhan Financial Group Co (SHG) has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong value characteristics [4] - The stock has a P/E ratio of 5.73, significantly lower than the industry average of 9.06, with a 52-week Forward P/E range of 3.67 to 6.79 and a median of 5.32 [4] - SHG's PEG ratio is 0.63, compared to the industry average of 0.70, with a historical range of 0.53 to 1.40 and a median of 0.68 [5] - The P/S ratio for SHG is 0.75, while the industry average is 1.2, indicating a favorable valuation based on sales [6] - SHG's P/CF ratio stands at 4.72, well below the industry average of 13.93, with a historical range of 3.34 to 5.19 and a median of 4.05 [7] - These metrics suggest that SHG is likely undervalued, supported by a strong earnings outlook, making it an attractive value stock [8]

Core Viewpoint - Shinhan Financial (SHG) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is effective for individual investors as it focuses on changes in earnings estimates, which are often more reliable than subjective ratings from Wall Street analysts [2][4]. - The upgrade reflects a positive outlook on Shinhan Financial's earnings, likely leading to increased buying pressure and a rise in stock price [3][5]. Earnings Estimate Revisions - Empirical research indicates a strong correlation between earnings estimate revisions and near-term stock movements, making it beneficial for investors to track these revisions [6]. - Shinhan Financial is projected to earn $6.32 per share for the fiscal year ending December 2024, representing a year-over-year increase of 2.6%. Over the past three months, the Zacks Consensus Estimate for the company has risen by 1.6% [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - The upgrade of Shinhan Financial to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Core Insights - The article compares Shinhan Financial (SHG) and Erste Group Bank AG (EBKDY) to determine which stock offers better value for investors [1] Valuation Metrics - SHG has a forward P/E ratio of 6.40, while EBKDY has a forward P/E of 6.49 [5] - SHG's PEG ratio is 0.70, indicating a better expected earnings growth rate compared to EBKDY's PEG ratio of 0.99 [5] - SHG's P/B ratio is 0.51, compared to EBKDY's P/B of 0.72, suggesting SHG is undervalued relative to its book value [6] Earnings Outlook - SHG is currently experiencing an improving earnings outlook, which enhances its attractiveness in the Zacks Rank model [7] - The Zacks Rank for SHG is 2 (Buy), while EBKDY is rated 4 (Sell), indicating a more favorable earnings estimate revision trend for SHG [3]

Financial Data and Key Metrics Changes - In Q3 2024, the company reported a net income of KRW1 trillion and 238.6 billion, a decrease of 10.1% quarter-on-quarter (QoQ) [5] - Interest income increased by 1.2% QoQ, driven by growth in the bank's loan book [5] - Non-interest income decreased by 25.6% QoQ due to significant losses in securities derivative transactions and conservative valuation impairments in overseas alternative investments [5][10] - The CET1 ratio at the end of September 2024 is estimated at 13.13%, a decrease of 6 basis points due to operational risk RWA impacts [3][12] Business Line Data and Key Metrics Changes - Bank won loans increased by 3.5% during the quarter, with household loans rising by 6.3% QoQ driven by real estate purchasing demand [8] - Corporate loans increased by 1.4% in Q3, focusing on Blue Chip corporate borrowers [8] - Non-interest income from securities and derivatives fell by 47.1% QoQ, primarily due to a KRW135.7 billion loss in derivative trading [10] Market Data and Key Metrics Changes - The cumulative credit cost ratio for Q3 decreased by 4 basis points compared to the first half of the year, posting 44 basis points [6][11] - The Group's CIR improved by 1.2 percentage points year-on-year to 37.9%, driven by higher operating profit before expenses [5][11] Company Strategy and Development Direction - The company is committed to enhancing shareholder returns through a share buyback and cancellation program totaling KRW400 billion, including KRW250 billion in Q4 2024 [6][7] - The focus is shifting towards qualitative growth and capital efficiency, with a target ROC of about 13% [21][22] - The company plans to minimize loan growth in Q4 relative to its RWA budget, emphasizing profitability and asset soundness [8][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by recent losses in derivatives trading and emphasized the importance of strengthening internal controls [3][4] - The outlook for NIM is expected to decline due to anticipated cuts in benchmark interest rates, with a proactive approach to managing funding rates [18] - The company expects gradual improvement in asset quality and provisioning, with no large-scale provisioning anticipated for the remainder of the year [32] Other Important Information - The company is actively cooperating with regulators regarding the investigation into the derivative trading losses and is reviewing its internal control systems [4] - The Group's total PF loan exposure is KRW9.4 trillion, representing about 2.2% of the total loan book, with significant provisioning already set aside [30][31] Q&A Session Summary Question: Shareholder return rate and triggers for increasing TSR - Management confirmed a commitment to gradually increase the TSR rate and emphasized the importance of CET1 growth and earnings growth as triggers for this increase [16][17] Question: NIM outlook - Management indicated that NIM is expected to decline further due to market conditions and interest rate cuts, with ongoing management of funding rates to mitigate impacts [18] Question: Loan growth targets for next year - The company targets a loan growth of about 5% for next year, focusing on qualitative growth and capital efficiency [21][22] Question: Continuation of share buyback program - Management expressed a commitment to maintaining the share buyback program, prioritizing share cancellation to achieve the targeted reduction by 2027 [25] Question: Provisioning outlook - The company anticipates a credit cost ratio of around 45 basis points by year-end, with no large-scale provisioning expected [26] Question: PF exposure and provisioning - Management provided insights into the current status of PF exposure, indicating a cautious approach to provisioning and restructuring plans [30][31] Question: RWA data disclosure - Management acknowledged the need for more segmented data on RWA and committed to enhancing RWA management going forward [34][36]

NYSE We believe finance should be Friendly, Nore Secure, Creative Business Results 3Q 2024 Shinhan Financial Group Disclaimer 2 The financial information contained herein has not been reviewed by independent auditors. Therefore, no assurance is given that the financial information is accurate or complete, and such financial information may differ from the financial information to be contained in our financial statements audited by independent auditors. The information contained herein is subject to change w ...

NYSE We believe finance should be Friendly, nore Secure, Creative Busines Results 2Q 2024 Shinhan Financial Group Disclaimer 2 The financial information contained herein has not been reviewed by independent auditors. Therefore, no assurance is given that the financial information is accurate or complete, and such financial information may differ from the financial information to be contained in our financial statements audited by independent auditors. The information contained herein is subject to change wi ...

Company Overview - Shinhan Financial is headquartered in Seoul and has experienced a price change of 32.36% this year [3] - The company currently pays a dividend of $0.3 per share, resulting in a dividend yield of 2.99%, which is lower than the Banks - Foreign industry's yield of 3.86% and the S&P 500's yield of 1.56% [3] Dividend Performance - The annualized dividend of Shinhan Financial is $1.22, reflecting a 31.6% increase from the previous year [4] - Over the past five years, the company has increased its dividend three times year-over-year, with an average annual increase of 4.37% [4] - The current payout ratio is 19%, indicating that the company paid out 19% of its trailing 12-month earnings per share as dividends [4] Earnings Expectations - Shinhan Financial is expected to see earnings growth this fiscal year, with the Zacks Consensus Estimate for 2024 at $6.22 per share, representing a 0.97% increase from the previous year [5] Investment Considerations - The company is viewed as a compelling investment opportunity due to its strong dividend performance and current Zacks Rank of 3 (Hold) [7]

Company Overview - Shinhan Financial (SHG) is headquartered in Seoul and operates in the Finance sector [3] - The stock has experienced a price change of 37.39% since the beginning of the year [3] Dividend Information - Currently, Shinhan Financial pays a dividend of $0.3 per share, resulting in a dividend yield of 2.88% [3] - The dividend yield of the Banks - Foreign industry is 3.85%, while the S&P 500's yield is 1.58% [3] - The company's annualized dividend of $1.22 has increased by 31.6% from the previous year [4] - Over the last 5 years, Shinhan Financial has raised its dividend 3 times, averaging an annual increase of 4.37% [4] - The current payout ratio is 19%, indicating that the company paid out 19% of its trailing 12-month EPS as dividends [4] Earnings Growth - For the fiscal year 2024, the Zacks Consensus Estimate for earnings is $6.22 per share, reflecting a year-over-year growth rate of 0.97% [5] Investment Considerations - Shinhan Financial is considered a strong dividend play and presents a compelling investment opportunity [7] - The stock currently holds a Zacks Rank of 3 (Hold) [7]

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments. While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a ...