SEOUL, July 24 (Yonhap) — Shinhan Financial Group Co., a major South Korean banking group, said Friday its net profit fell 12.3 percent in the second quarter from a year earlier due to increased loan-loss provisions.
For the three months that ended June 30, Shinhan Financial posted a net profit of 873.1 billion won (US$725.9 million), compared with a net profit of 996.1 billion won a year earlier, the company said in a statement.
The banking group said the decline in net profit is blamed on increased loan-loss provisions.
Shinhan Financial set aside 538.7 billion won as loan-loss provisions in the second quarter in a preemptive measure against the pandemic fallout, up from 274.9 billion won from a year earlier.
Shinhan Financial’s interest income rose 3.1 percent on-year to 4 trillion won during the January-June period.
Its net interest margin, a key barometer of profitability, fell to 1.84 percent at the end of June, compared with 2.05 percent from the same period of last year.
Flagship Shinhan Bank saw its net profit decline 22.5 percent on-year to 514.2 billion won for the second quarter.
Shares in Shinhan Financial remained unchanged at 30,500 won Friday, compared with the broader KOSPI’s 0.71 percent loss.