Shinhan Financial Group Co., Ltd. (NYSE:SHG) Q3 2023 Earnings Call Transcript October 27, 2023 1:00 AM ET
Company Participants
Kim Myoung Hee - Chief Development Officer
Bang Dong-Kwon - Chief Risk Officer
Park Kyoung Won - Shinhan Life, CFO
Kim Kihoon - Shinhan Bank, CFO
Conference Call Participants
Seol Yong Jin - SK Securities
Park Hye-jin - Daishin Securities
Jeong Tae Joon - Yuanta Securities
Cho Jihyun - JPMorgan
Unidentified Company Representative
[Starts Abruptly] [Foreign Language] [interrupted] I will first go through our business highlights from Page 5 of the slide.
Page 5. We have maintained steady operating income through Q3 2023. Net income was KRW1.1921 trillion, down KRW46.2 billion Q-o-Q. There was recognition of one-off costs such as investment-related provisioning in Shinhan Securities. Noninterest income fell from Q2, owing to decrease in securities-related income resulting from market volatility, but the fee income is growing evenly across the different items. The group's cost income ratio was 39.2%, slightly up Y-o-Y, but excluding ERP cost, it fell slightly.
Provision for credit loss fell Q-o-Q by KRW81 billion. Credit cost ratio was 50 bp, increasing Y-o-Y, but falling Q-o-Q. Last, the group's Board resolved on the 25th on KRW525 in dividend per share in Q3 and KRW100 billion in share buyback and cancellation in Q4. It brings the group's total resolution on share buyback and cancellation to KRW500 billion in 2023. Looking ahead, we will continue with sustainable capital and shareholder return policy as we try to secure capital adequacy and in response to changes in capital regulated -- capital regulations.
Page 6 is on the group's major business highlights and Page 7 shows the group's net income and income indicators provided for your information. Moving on to Page 8 on the group's income breakdown. Page 8 on the group's interest income. Interest income in Q3 2023 was KRW2.7633 trillion, up 2.6% Q-o-Q. It is attributable to growth in interest-bearing assets and business days despite the fall in the group's margin by 1 bp. In Q3, the bank's NIM was 1.63%, down 1 bp Q-o-Q due to loan growth, primarily in high-quality assets and preemptive funding.
The bank's loan assets grew 1.1% in Q3 following the 0.7% in the first half. Retail loans fell 2.5% from the end of last year, owing to slowing demand for credit loan from tightening rates and DSR regulations, as well as securitization of mortgages. Corporate loans grew 5.5% from the end of last year on the back of continued demand from large companies and quality SMEs. Please refer to Page 33 for more details.