Shinhan Financial Group Co Ltd (SHG)

Price$82.29Cached quoteAs of 2026-09-04 16:23 UTC

AI: Fair-priced

Price checkThe shares look fair-priced: solid returns now offset a much richer valuation than before.

At the observed market quote, Shinhan trades at roughly ten times earnings from the last 12 months and around 0.8–0.9 times book value, the accounting value of shareholder equity. That looks reasonable, not obviously cheap, because the stock has rerated sharply from 2024–2025 levels when this valuation measure was closer to 0.4–0.6. Profitability has also improved: second-quarter 2026 return on equity, meaning profit earned on shareholder capital, reached 12.4%. The valuation inference is fair-priced unless that return proves durable through a full credit cycle.

Big pictureEarnings have proved durable, but bank cash flows naturally swing with lending and deposits.

From 2019 through 2024, net income stayed between KRW 3.4 trillion and KRW 4.7 trillion, ending at KRW 4.45 trillion in 2024. First-half 2026 profit attributable to owners then reached KRW 3.44 trillion, up 13.3% from a year earlier. Operating cash flow was far less steady, ranging from negative KRW 1.0 trillion in 2020 to KRW 7.2 trillion in 2022. For a bank, those swings often reflect movements in loans, deposits and securities, so earnings and credit losses are more informative than conventional free cash flow.

Business strengthCapital is strong, and buybacks are shrinking the share count after earlier dilution.

Stockholders’ equity increased from KRW 39.2 trillion in 2019 to KRW 56.1 trillion in 2024, while cash and equivalents rose to KRW 35.2 trillion. More important for a bank, the core equity capital ratio was 13.43% at June 2026; this measures high-quality capital available to absorb losses. Shares outstanding fell from 512.8 million in 2023 to 498.9 million in 2024, and voting shares were about 469.5 million by June 2026. A further KRW 700 billion repurchase targets roughly 6.7 million shares for cancellation.

What could change the storySustained double-digit profitability adds upside; weaker credit quality or trading gains could reverse it.

The bull case strengthens if Shinhan keeps return on equity in its 10%–12% target range while holding core equity capital above 13% and returning at least half of earnings through dividends and buybacks. Buying shares below book value can increase book value and earnings per remaining share. The bear case is that recent profit is partly cyclical: first-half 2026 securities and foreign-exchange trading gains were KRW 3.57 trillion, already above full-year 2025, while credit-loss provisions were KRW 950 billion. A market reversal or renewed loan losses would reduce normalized earnings.

AI: News

Record second-quarter profitSecond-quarter profit hit a record and beat expectations, strengthening confidence in near-term earnings power.

On July 23, Shinhan reported KRW 1.82 trillion of second-quarter profit attributable to owners, up 17.5% from a year earlier. First-half profit reached KRW 3.44 trillion, up 13.3%. Yonhap said the quarter beat the KRW 1.69 trillion analyst consensus. Interest and non-interest income both reached record quarterly levels, while second-quarter loan-loss reserves fell 14.7% from the prior quarter. Those figures support higher earnings expectations, although one quarter does not establish a permanent improvement.

Bigger buyback and dividendThe board expanded buybacks and raised the quarterly dividend, directly increasing cash returned per share.

Also on July 23, the board approved a KRW 700 billion repurchase over roughly three months and a KRW 740-per-share second-quarter dividend. The company said buybacks scheduled through October now total KRW 1.4 trillion, with another program possible in the fourth quarter. The new repurchase targets about 6.7 million common shares for cancellation; a separate first-half program had already been completed. Cancelling shares can lift each remaining share’s claim on earnings and book value, especially when purchases occur below book value.

Value-Up targets strengthenedShinhan formalized higher profitability and shareholder-return goals, supporting the market’s rerating of the shares.

On April 23, Shinhan adopted its “Triple Plus” value plan, targeting return on equity of 10%–12%, a shareholder return ratio of at least 50%, and a core equity capital ratio of at least 13%. By June, management reported 12.4% second-quarter return on equity and 13.43% core equity capital. The shares rose strongly in the following months, but timing alone does not establish that the plan caused the move. Its valuation impact depends on sustained execution rather than the targets themselves.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2010	2009	2008	2007
Revenue	₩18.39T	₩74.06T	₩61.33T	₩58.82T	₩6.48T	₩10.61T	₩10.45T	₩9.18T	₩8.90T	₩7.75T	₩7.67T	₩11.97T	₩10.91T	₩10.35T	₩9.91T
Research & development	—	₩23.92B	₩21.49B	₩20.70B	₩25.32B	₩20.27B	₩17.74B	₩13.93B	₩14.09B	₩14.07B	₩13.44B	—	—	—	—
Operating expenses	—	—	—	—	—	—	—	—	—	—	—	₩7.90T	₩7.14T	₩6.73T	₩6.74T
Operating income	—	₩6.46T	₩6.10T	₩5.91T	₩5.95T	₩4.93T	₩5.05T	₩4.50T	₩3.83T	₩3.11T	₩2.97T	—	—	—	—
Operating margin	—	8.72%	9.95%	10.04%	91.79%	46.47%	48.29%	49.02%	43.05%	40.10%	38.78%	—	—	—	—
EBITDA	—	₩7.74T	₩7.29T	₩6.91T	₩6.85T	₩5.70T	₩5.72T	₩4.80T	₩4.08T	₩3.37T	₩3.25T	—	—	—	—
EBITDA margin	—	10.45%	11.88%	11.74%	105.71%	53.71%	54.77%	52.31%	45.89%	43.45%	42.41%	—	—	—	—
Net income	₩4.97T	₩4.56T	₩4.48T	₩4.76T	₩4.11T	₩3.50T	₩3.64T	₩3.20T	₩2.95T	₩2.82T	₩2.45T	₩2.84T	₩1.13T	₩1.48T	₩1.93T
Net profit margin	27.03%	6.15%	7.30%	8.09%	63.42%	32.97%	34.86%	34.85%	33.15%	36.44%	31.90%	23.76%	10.40%	14.31%	19.47%
Basic EPSper basic share	₩9,812.00	₩8,441.00	₩8,048.00	₩8,498.00	₩7,308.00	₩6,654.00	₩7,000.00	₩6,579.00	₩6,118.00	₩5,736.00	₩4,789.00	—	—	—	—
Diluted EPSper diluted share	₩9,812.00	₩8,441.00	₩8,048.00	₩8,498.00	₩7,308.00	₩6,654.00	₩7,000.00	₩6,579.00	₩6,118.00	₩5,736.00	₩4,789.00	—	—	—	—