South Korea’s leading banking group Shinhan Financial Group Co. on Monday reported a 25.1 percent increase in net profit for the first nine months of this year, thanks to a growth in interest income and a decline in loan-loss reserves.

According to its regulatory filing on Monday, Shinhan Financial Group has raked in 2.7 trillion won ($2.4 billion) in net income during the January-September period, 25.1 percent from the same period last year. This is the financial group’s largest-ever net income for the period, it said. Over the same period, operating profit rose 4.4 percent on year to 6.9 trillion won. In the July-September quarter alone, the company posted 817.3 billion won in net income, up 15.5 percent from a year ago.

Shares of Shinhan Financial Group closed Monday at 50,900 won, down 200 won or 0.39 percent from the previous session.

The group’s stellar results were largely driven by a steady growth in interest revenue amid an increase in loans to both businesses and households, as well as a sharp fall in allowances for bad debt, the company said.

The group’s cumulative interest income for the first nine months of this year reached 5.77 trillion won, up 8.6 percent from a year ago, while its loan-loss provisions fell a whopping 81.8 percent to 158.9 billion won during the same period.

Shinhan Bank, the group’s key lending unit, has earned a net income of 1.7 trillion won in the first nine months of this year, up 12.2 percent from a year ago. Its loan-loss reserves contracted 56.5 percent to 240.7 billion won.

An unnamed official from Shinhan Bank said that the lender was not required to prepare a large sum of loan-loss reserves this year, unlike last year when it had to pile up a huge amount of money to cushion losses from ongoing restructuring in shipbuilding and shipping industries.

Among non-banking units, Shinhan Card has earned 780.6 billion won in cumulative net income in the January-September period, up 46.6 percent from a year ago. Shinhan Investment Corp.’s net income has also surged 83.2 percent to 157.2 billion won and Shinhan Capital Co. more than doubled to to 66.9 billion won over the same period.

By Kim Tae-sung

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