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Shinhan Financial (SHG)
:SHG
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Shinhan Financial Group Co
(NYSE:SHG)
Rating:71Outperform
Price Target:
$54.00
▲(10.50% Upside)
Shinhan Financial Group Co (SHG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$23.77B
Dividend Yield2.57%
Average Volume (3M)244.25K
Price to Earnings (P/E)7.3
Beta (1Y)0.83
Revenue Growth28.42%
EPS Growth4.76%
CountryUS
Employees189
SectorFinancial
Sector Strength65
IndustryBanks - Regional
Share Statistics
EPS (TTM)2.21
Shares Outstanding485,494,930
10 Day Avg. Volume209,225
30 Day Avg. Volume244,247
Financial Highlights & Ratios
PEG Ratio1.13
Price to Book (P/B)0.44
Price to Sales (P/S)0.69
P/FCF Ratio6.38
Enterprise Value/Market Cap3.67
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda0.01
Forecast
1Y Price Target
$54.00Price Target Upside10.50% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Shinhan Financial Group Co Business Overview & Revenue Model
Company DescriptionShinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through six segments: Banking, Credit Card, Securities, Life Insurance, Credit, and Others. It offers retail banking services, including demand, savings, and fixed deposit-taking; checking accounts; mortgage and home equity, and retail lending; electronic banking and automatic teller machines (ATM); and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting; securitization and derivatives services comprising securities and derivative products, and foreign exchange trading; and working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets consisting of foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company offers trust account management, securities brokerage, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. As of December 31, 2021, it operated a network of 784 service centers; 5,234 ATMs; 7 cash dispensers; and 85 digital kiosks. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.
How the Company Makes MoneyShinhan Financial Group Co. generates revenue primarily through interest income from its banking operations, fees and commissions from its diverse range of financial services, and investment income. The company's key revenue streams include net interest income from loans and deposits, fees from credit card services, and commissions from its asset management and securities brokerage services. Additionally, Shinhan benefits from strategic partnerships and its extensive network of domestic and international branches, which enhance its ability to provide comprehensive financial solutions and expand its customer base.
Shinhan Financial Group Co Earnings Call Summary
Earnings Call Date:Jul 25, 2025
(Q2-2025)
| % Change Since: -2.88%|
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant improvements in the CET1 ratio and net income, driven by strong noninterest income and proactive shareholder returns. However, concerns remain regarding increased credit costs, sluggish loan growth, and challenges in the real estate trust business. Asset quality issues persist, but the Group's overseas business maintains solid performance.Q2-2025 Updates
Positive Updates
Improved CET1 Ratio
The Group's CET1 ratio was provisionally estimated at 13.59%, an improvement of 32 bps compared to the previous quarter, driven by solid earnings and a weaker exchange rate.
Net Income Growth
The Group recorded a net income of KRW1,549.1 billion, growing 4.1% QoQ due to improvements in noninterest income.
Increased Shareholder Returns
The Board resolved to pay a cash dividend of KRW571 per share and announced a share buyback amounting to KRW800 billion, part of a year-round share buyback program.
Noninterest Income Surge
Noninterest income grew 34.7% QoQ, driven by securities and FX derivative-related gains.
Overseas Business Performance
The Group's overseas business continues to perform solidly despite ongoing uncertainties.
Negative Updates
Increased Credit Costs
The credit cost ratio increased slightly due to delayed economic recovery, with expectations of mid- to late 40 bps range for H2.
Sluggish Loan Growth
Loan growth was weaker than expected in H1, particularly in the corporate loan segment, due to a conservative approach focusing on profitability and asset quality.
Challenges in Real Estate Trust
There are ongoing challenges in the real estate trust business, with KRW340 billion in provisioning set against KRW380 billion in loans.
Asset Quality Concerns
The NPL ratio has not fallen, and the price for write-offs and disposals is decreasing rapidly compared to last year.
Company Guidance
In the 2025 Q2 earnings call for Shinhan Financial Group, it was reported that the Group's CET1 ratio improved by 32 basis points quarter-over-quarter, reaching 13.59%, driven by solid earnings and efficient management of risk-weighted assets. The Board resolved a cash dividend of KRW571 per share and approved a share buyback program totaling KRW800 billion, with KRW600 billion to be executed in H2 2025 and KRW200 billion in January 2026. The Group's net income increased by 4.1% to KRW1,549.1 billion, supported by a 34.7% rise in noninterest income, despite higher credit costs due to delayed economic recovery. The cost-to-income ratio remained stable at 36.6% in H1, and the ROE and ROTCE improved by 0.7%, reaching 11.4% and 12.9% respectively. The Group's NIM declined by 16 bps, and the RWA decreased by KRW4 trillion, influenced by foreign currency loan adjustments. The Group anticipates credit costs to be in the mid- to late 40 bps range for H2 2025, with continued focus on maintaining capital stability and strategic resource allocation.Shinhan Financial Group Co Financial Statement Overview
Summary
Shinhan Financial Group shows stable revenue growth and strong EBIT margins. However, the balance sheet reveals moderate leverage typical in banking, with potential financial risks. Cash flow challenges exist, with negative growth in Free Cash Flow and Operating Cash Flow ratios indicating liquidity issues.Income Statement
Shinhan Financial Group demonstrated steady revenue growth with a Revenue Growth Rate of 3.03% from 2023 to 2024. The Gross Profit Margin remained consistent, as Total Revenue equaled Gross Profit. Net Profit Margin improved slightly to 3.05% in 2024. However, the EBIT margin showed minor fluctuation, maintaining a strong position at 59.74% in 2024. The absence of EBITDA data limits the depth of analysis.70
Positive
Balance Sheet
The company's Debt-to-Equity Ratio stands at 2.34 in 2024, indicating a moderate level of leverage typical for the banking industry. Return on Equity (ROE) improved to 7.94% in 2024, reflecting effective use of equity. The Equity Ratio declined slightly to 7.58%, suggesting a small increase in financial leverage, which could pose some risks if not managed carefully.65
Positive
Cash Flow
Shinhan Financial Group experienced a significant decline in Free Cash Flow, leading to a negative Free Cash Flow Growth Rate. The Operating Cash Flow to Net Income Ratio was negative in 2024, indicating challenges in converting earnings into cash. The Free Cash Flow to Net Income Ratio was also negative, suggesting cash flow difficulties which need to be addressed to improve financial stability.50
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 35.26T | 35.38T | 14.18T | 13.25T | 25.75T | 11.59T |
| Gross Profit | 15.57T | 15.57T | 14.22T | 13.25T | 20.84T | 11.59T |
| EBITDA | 7.55T | 7.31T | 7.15T | 7.37T | 6.49T | 0.00 |
| Net Income | 4.62T | 4.45T | 4.37T | 4.67T | 4.02T | 3.41T |
Balance Sheet | ||||||
| Total Assets | 10.00T> | 10.00T> | 10.00T> | 10.00T> | 10.00T> | 10.00T> |
| Cash, Cash Equivalents and Short-Term Investments | 10.00T> | 10.00T> | 10.00T> | 94.21T | 94.37T | 92.87T |
| Total Debt | 10.00T> | 10.00T> | 10.00T> | 10.00T> | 10.00T> | 10.00T> |
| Total Liabilities | 10.00T> | 10.00T> | 10.00T> | 10.00T> | 10.00T> | 10.00T> |
| Stockholders Equity | 56.82T | 56.05T | 53.72T | 50.73T | 47.29T | 44.07T |
Cash Flow | ||||||
| Free Cash Flow | 6.86T | 3.85T | -186.39B | 6.65T | 10.19T | -5.05T |
| Operating Cash Flow | 7.52T | 4.63T | 1.91T | 7.59T | 11.08T | -4.41T |
| Investing Cash Flow | -552.16B | 148.53B | -4.27T | -11.03T | -12.03T | -3.03T |
| Financing Cash Flow | 492.25B | -182.65B | 8.38T | 3.39T | 4.96T | 7.88T |
Shinhan Financial Group Co Technical Analysis
Positive
48.87
Price Trends
45.94
Positive
40.07
Positive
38.05
Positive
Market Momentum
0.74
Positive
54.23
Neutral
29.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHG, the sentiment is Positive. The current price of 48.87 is below the 20-day moving average (MA) of 49.45, above the 50-day MA of 45.94, and above the 200-day MA of 38.05, indicating a neutral trend. The MACD of 0.74 indicates Positive momentum. The RSI at 54.23 is Neutral, neither overbought nor oversold. The STOCH value of 29.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SHG.
Shinhan Financial Group Co Risk Analysis
Shinhan Financial Group Co disclosed 46 risk factors in its most recent earnings report. Shinhan Financial Group Co reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
The implementation of IFRS 17 beginning on January 1, 2023 renders certain of our historical financial information as of December 31, 2021 and for the year ended December 31, 2021, included in this annual report, not directly comparable with our financial information as of December 31, 2022 and 2023 and for the years ended December 31, 2022 and 2023 included in this annual report. Q4, 2023
2.
Evolving regulatory framework for artificial intelligence and machine learning technology, may have an adverse impact on our business, financial condition and results of operations. Q4, 2023
3.
Our business may be materially and adversely affected by legal claims and regulatory actions against us. Q4, 2023
Shinhan Financial Group Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $18.81B | 12.17 | 16.35% | 5.89% | 3.89% | 15.26% | |
72 Outperform | $27.38B | 7.35 | 10.66% | 3.04% | 18.54% | 28.34% | |
71 Outperform | $12.67B | 6.43 | 9.43% | 4.24% | 22.26% | 2.51% | |
71 Outperform | $23.77B | 7.31 | 8.79% | 2.57% | 28.42% | 4.76% | |
70 Outperform | $17.78B | 17.42 | 9.43% | 6.37% | -3.94% | 31.52% | |
66 Neutral | $27.72B | 8.23 | 11.76% | 2.20% | -4.58% | 39.03% | |
65 Neutral | £5.10B | 9.36 | 5.51% | 4.90% | 24.59% | -22.68% |
* Financial Sector Average
Performance Comparison
SHG
Shinhan Financial Group Co
48.16
9.35
24.09%
BBD
Banco Bradesco SA
2.82
0.46
19.49%
BSBR
Banco Santander Brasil
4.80
0.02
0.42%
BAP
Credicorp
242.00
90.55
59.79%
KB
Kb Financial Group
81.03
22.23
37.81%
WF
Woori Finance Holdings Co
53.78
21.84
68.38%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.