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]

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]

Financial Data and Key Metrics - Interest income grew 0.2% QoQ to KRW 2,821.8 billion despite declining market interest rates [57] - Corporate loans grew 6.0% during the quarter, driven by demand from large companies [38] - Non-interest income increased 10.9% QoQ to KRW 1,112.1 billion, driven by favorable market conditions [55][71] - SG&A expenses increased 7.2% QoQ due to higher advertising and service expenses [58] - CET1 ratio was 13.05% as of June 2024, down 6 bps QoQ due to RWA growth [48][56] - Credit cost ratio for Q2 was 48 bps, down 5 bps YoY, with recurring credit cost ratio at 31 bps [61][45] Business Line Performance - Bank NIM declined 4 bps QoQ to 1.60%, with interest-bearing assets growing 2.9% QoQ [41][42] - Fee income increased 1.8% QoQ, led by gains in credit cards and IB business [43] - Household loans grew 0.1%, driven by home mortgages, but growth slowed in Q2 [64] - Card delinquency ratio improved 12 bps QoQ, recovering to levels seen at the end of 2023 [59] Market and Regional Performance - Real estate PF exposure increased due to specific sites (Doan and Seoripul), adding KRW 1 trillion [90] - Provisioning rate for real estate PF was 12% for securities and 7% for Shinhan Capital, with group-level provisioning at 4.2% [90] - Delinquency ratios for SOHO loans and card business stabilized, with proactive credit management [59] Strategic Direction and Industry Competition - The company aims to achieve an ROE of 10% and ROTCE of 11.5% by 2027, with a CET1 ratio above 13% [50] - Shareholder return rate will be increased to 50% by 2027, with plans to reduce the number of shares to below 450 million [14][7] - The company will focus on improving ROA, leverage, and RWA management to enhance profitability [8][52] - Digital and ESG initiatives are being prioritized, with detailed updates provided in the presentation [49] Management Commentary on Operating Environment and Future Outlook - The company expects to maintain a CET1 ratio above 13% while increasing shareholder returns [27] - NIM is expected to decline slightly in H2 2024 due to lower policy rates and LCR regulations, but funding costs will be managed [92] - The company has set aside KRW 182.7 billion in additional provisions for real estate PF in Q2, with total exposure at KRW 269.6 billion [22][29] - Annual credit cost guidance is expected to be around 45 bps, with recurring provisions dominating in H2 [80][87] Other Important Information - The company resolved to distribute a per-share dividend of KRW 541 for Q2 2024 [56] - A KRW 300 billion share buyback is underway, with shares to be canceled upon completion [40] - The company plans to retire shares to below 500 million by 2024 and 450 million by 2027 [14][7] Q&A Session Summary Question: Shareholder Return and ROE Targets - The company aims to increase shareholder return to 50% by 2027, with a phased approach to TSR growth [19][20] - CET1 ratio will be maintained above 13%, allowing for higher shareholder returns without further growth [27] Question: Real Estate PF Provisions - Additional provisions of KRW 182.7 billion were set aside in Q2 for real estate PF, with total exposure at KRW 269.6 billion [22][29] - Provisioning rates for real estate PF are 12% for securities and 7% for Shinhan Capital [90] Question: NIM and Asset Growth Guidance - NIM is expected to decline slightly in H2 2024 due to lower policy rates, but funding costs will be managed [92] - Loan growth in H2 will focus on prime assets, with home mortgages and corporate loans driving growth [76] Question: Share Buyback and Dividend Policy - The company plans to retire shares to below 450 million by 2027, with flexibility in DPS and total dividend amounts [14][85] - If PBR falls below 1, the company will prioritize share cancellation over dividends [75] Question: Credit Cost Guidance - Nominal credit cost ratio for Q2 was 48 bps, with recurring credit cost ratio at 31 bps [61][45] - Annual credit cost guidance is expected to be around 45 bps, with recurring provisions dominating in H2 [80][87]

Core Insights - The article discusses the value investment opportunities in Shinhan Financial (SHG) and Nordea Bank AB (NRDBY), highlighting SHG as the superior value option based on various financial metrics [5][9]. Valuation Metrics - SHG has a forward P/E ratio of 6.18, while NRDBY has a forward P/E of 7.59, indicating that SHG is more attractively priced relative to its earnings [3]. - SHG's PEG ratio is 0.66, compared to NRDBY's PEG ratio of 0.73, suggesting that SHG offers better value when considering expected earnings growth [3]. - SHG has a P/B ratio of 0.43, significantly lower than NRDBY's P/B ratio of 1.29, further indicating SHG's undervaluation relative to its book value [8]. Earnings Outlook - Both SHG and NRDBY currently hold a Zacks Rank of 2 (Buy), reflecting positive revisions to their earnings estimates and improving earnings outlooks [6]. - The article emphasizes that while both companies have solid earnings prospects, SHG stands out as the better value option based on the discussed metrics [9]. Value Grades - SHG has a Value grade of B, while NRDBY has a Value grade of D, indicating a significant difference in their perceived value by the Style Scores system [4]. - The Style Score Value grade incorporates various fundamental metrics, including P/E ratio, P/S ratio, earnings yield, and cash flow per share, which are critical for value investors [7].

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits. The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are ...

Based in Seoul, Shinhan Financial (SHG) is in the Finance sector, and so far this year, shares have seen a price change of 10.3%. The financial services company is paying out a dividend of $0.61 per share at the moment, with a dividend yield of 3.61% compared to the Banks - Foreign industry's yield of 4.41% and the S&P 500's yield of 1.59%. Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. ...