Shinhan Financial Group: Q2 2026 net profit up 17.1% on strong net interest income, but operating leverage remains in question

25 августа Shinhan Financial Group раскрыла результаты за второй квартал 2026 года: чистая прибыль выросла на 17,1% год к году, до 1 846,7 млрд вон, при этом чистый процентный доход прибавил 9,4%, до 3 134,4 млрд вон. Акции выглядят привлекательно на текущем уровне: P/E LTM составляет 9,4, а по модели портала потенциал роста — 14%, что делает бумагу недооценённой с учётом устойчивого роста процентных доходов и рентабельности капитала выше 11%.

Key takeaways

— Net interest income in Q2 2026 rose 9.4% YoY to KRW 3,134.4 billion, the main driver of profit

— EBITDA margin in Q2 2026 reached 88.7% versus 81.7% a year earlier, reflecting operating leverage on revenue growth

— Net profit in Q2 2026 grew 17.1% YoY to KRW 1,846.7 billion, with net profit as a share of net interest income at 58.9% versus 55.1% a year earlier

— Trailing dividend yield is 2.65%, below historical levels, but payouts remain sustainable given high return on equity

— P/E LTM of 9.36 and ROE of 11.9% suggest undervaluation: the portal's model implies 14% upside in the share price

— Operating expenses in Q2 2026 grew slower than revenues, supporting margin, but sustainability of this trend requires cost of risk control

Attractiveness

Key figures, KRW bn

Net interest income in Q2 2026 rose 9.4% YoY to KRW 3,134.4 billion, the main driver of profit

In Q2 2026, Shinhan Financial Group's net interest income reached KRW 3,134.4 billion, up 9.4% YoY. This is an acceleration from previous quarters: Q1 2026 saw 5.9% growth, Q4 2025 – 4.1%. The main drivers were loan portfolio expansion and improved interest margin, though specific factors are not disclosed in the report.

Interest income growth is a key metric for a bank, as it forms the bulk of revenue. The acceleration to 9.4% in Q2 2026 is the highest in the last four quarters, indicating a favorable rate environment and solid credit demand.

EBITDA margin in Q2 2026 reached 88.7% versus 81.7% a year earlier, reflecting operating leverage on revenue growth

In Q2 2026, EBITDA margin reached 88.7%, up 7 percentage points from 81.7% a year earlier. This was driven by operating expenses growing slower than revenues: EBITDA rose 18.8% YoY, while net interest income grew 9.4%.

The margin expansion reflects operating leverage: the bank increased revenues without a proportional rise in costs. However, this dynamic may be partly due to one-offs, such as low provisioning, which warrants attention in upcoming reports.

Net profit in Q2 2026 grew 17.1% YoY to KRW 1,846.7 billion, with net profit as a share of net interest income at 58.9% versus 55.1% a year earlier

Net profit for Q2 2026 reached KRW 1,846.7 billion, up 17.1% YoY. Net profit as a share of net interest income rose from 55.1% to 58.9%, indicating improved efficiency in converting interest income into bottom-line profit.

Profit growth was driven not only by higher interest income but also by cost control. However, part of the growth may be due to one-off items, such as investment gains or lower provisions, which are not disclosed in the provided data.

Trailing dividend yield is 2.65%, below historical levels, but payouts remain sustainable given high return on equity

Over the last 12 months, Shinhan Financial Group paid dividends yielding 2.65% at the current price. This is a moderate level, likely reflecting the bank's conservative dividend policy aimed at capital preservation.

Sustainability of payouts is supported by return on equity of 11.9%, which allows the bank to generate sufficient profit to maintain dividends. However, increasing payouts would require higher net profit or a higher payout ratio, which is not yet observed.

P/E LTM of 9.36 and ROE of 11.9% suggest undervaluation: the portal's model implies 14% upside in the share price

The current P/E LTM is 9.36, which looks moderate for a bank with return on equity of 11.9%. According to the portal's model, which compares annualized earnings to market cap, the share has 14% upside to fair value.

This suggests the market is pricing the bank slightly below its fundamental value, possibly due to concerns about asset quality or the macroeconomic environment. However, steady growth in interest income and high margins support an optimistic view on the share.

Operating expenses in Q2 2026 grew slower than revenues, supporting margin, but sustainability of this trend requires cost of risk control

In Q2 2026, EBITDA grew 18.8% YoY, significantly outpacing net interest income growth of 9.4%. This indicates that operating expenses, including provisions, grew slower, driving margin expansion.

However, this dynamic may be unsustainable if the bank faces deteriorating loan quality and has to increase provisioning. In coming quarters, the cost of risk will be a key factor, potentially pressuring profits if the macroeconomic environment worsens.

Valuation on the latest reported figures

Bottom line

Во втором квартале 2026 года Shinhan Financial Group показал сильный рост чистой прибыли на 17,1% благодаря ускорению процентных доходов и контролю над расходами. Однако часть этого роста может быть обязана разовым факторам, и устойчивость маржи будет зависеть от стоимости риска. При P/E LTM 9,36 и потенциале роста по модели портала в 14% акция выглядит привлекательно, но инвесторам стоит следить за качеством активов и динамикой процентной маржи в следующих отчётах.