Shinhan Investment & Securities’ third-quarter net profit plunges 77% from previous quarter to 65.3 billion won

[Financial News] Shinhan Investment & Securities’ third-quarter results this year declined amid a contraction in stock market trading and weak performance in investment product operations.
Cumulative results improved on the back of a buoyant stock market in the first half, but profitability has slowed sharply since the market plunged in the third quarter.
According to a disclosure by Shinhan Financial Group Co., Ltd. on the 27th, Shinhan Investment & Securities posted third-quarter net profit of 65.3 billion won. This was down 35.0% from the same period last year and plunged 77.4% from the previous quarter.
Revenue and operating profit also declined. Third-quarter revenue was 367.8 billion won, down 15.4% year over year, while operating profit fell 42.2% to 83.4 billion won. Compared with the previous quarter, the respective declines reached 52.4% and 77.0%.
The main causes of the weaker results were lower brokerage commission income as stock market trading turnover fell, and deteriorating results from investment product operations. Third-quarter commission income fell 47.2% from the previous quarter to 278.7 billion won.
By category, brokerage commissions from stock trading fell 47.2% to 203 billion won. Fees from financial products declined 53.9% to 26.5 billion won, while investment banking (IB) fees fell 19.6% to 24.8 billion won.
Profitability deteriorated particularly sharply in investment product operations. The company posted a loss of 56.5 billion won in this area in the third quarter. This marked a steep swing into the red compared with profits of 73 billion won in the second quarter and 56.7 billion won in the third quarter last year. Net interest income also fell 15.1% from the previous quarter to 145.7 billion won.
A Shinhan Financial Group Co., Ltd. official explained that operating revenue contracted as slower trading turnover reduced stock brokerage commissions, while rising interest rates also lowered earnings from investment product operations.
However, on a cumulative basis from the start of the year through the third quarter, results improved from a year earlier. Cumulative revenue rose 45.0% year over year to 1.8419 trillion won. Operating profit increased 79.8% to 831.7 billion won, and net profit rose 78.9% to 642.9 billion won.
The boost to results from a buoyant stock market in the first half lifted cumulative performance, but in the third quarter, weaker trading and deteriorating results from investment product operations combined to cause a sharp slowdown in quarterly results.

[email protected] Kang Jung-mo Reporter