ID :
27780
Fri, 10/31/2008 - 18:17
Auther :
Shortlink :
https://www.oananews.org//node/27780
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Shinhan Financial Group Q3 net dips 38.3 pct
SEOUL, Oct. 31 (Yonhap) -- Shinhan Financial Group Co., South Korea's No. 2 financial services company, said Friday its third-quarter earnings fell 38.3 percent on-year due mainly to investment losses from Lehman Brothers-related debt instruments and higher loan-loss reserves.
Net income amounted to 323.3 billion won (US$254.6 million) in the July-September
period, compared with 524.2 billion won a year earlier, the group said in a
regulatory filing.
Sales jumped 142.7 percent year-on-year to 15.9 trillion won while operating
profit declined 40 percent to 515.2 billion won, the group said.
"The group put aside about 200 billion won in further loan loss reserves in the
third quarter to cover one-off investment losses related to Lehman Brothers
Holdings Inc. and those following the failure of Taesan LCD Co.," an official at
the group said.
The group's securities unit booked 90.4 billion won in pre-tax losses after
investing in credit linked notes related to Lehman Bros. Shinhan Bank, the
flagship unit of the group, also assumed some losses after Taesan LCD, a local
maker of units for computer screens, collapsed due to losses from currency
options contracts.
Shares of Shinhan Financial Group tumbled 5.15 percent to 31,300 won on the main
bourse.
The outcome came as South Korean lenders, which are suffering from a dollar
shortage, have been increasingly reluctant to extend loans to smaller firms,
particularly amid the slowing economy and a global credit squeeze.
The group's total assets reached 315.2 trillion won as of the end of September,
up 17.6 percent from the previous year. Its net interest margin (NIM), a key
barometer of profitability, reached 3.5 percent as of the end of September,
compared with 3.49 percent in the second quarter.
Shinhan Bank logged a net profit of 214.3 billion won in the third quarter, down
32.2 percent from a year earlier. The bank unit's NIM rose to 2.1 percent in the
July-September period from 2.03 percent three months earlier.
Goodmorning Shinhan Securities Co., the brokerage unit of the group, posted a
loss for the first time in more than five years. The securities firm logged a
loss of 17.8 billion won in the third quarter, a turnaround from a profit of 48.2
billion won the previous year, the group said.
Net income amounted to 323.3 billion won (US$254.6 million) in the July-September
period, compared with 524.2 billion won a year earlier, the group said in a
regulatory filing.
Sales jumped 142.7 percent year-on-year to 15.9 trillion won while operating
profit declined 40 percent to 515.2 billion won, the group said.
"The group put aside about 200 billion won in further loan loss reserves in the
third quarter to cover one-off investment losses related to Lehman Brothers
Holdings Inc. and those following the failure of Taesan LCD Co.," an official at
the group said.
The group's securities unit booked 90.4 billion won in pre-tax losses after
investing in credit linked notes related to Lehman Bros. Shinhan Bank, the
flagship unit of the group, also assumed some losses after Taesan LCD, a local
maker of units for computer screens, collapsed due to losses from currency
options contracts.
Shares of Shinhan Financial Group tumbled 5.15 percent to 31,300 won on the main
bourse.
The outcome came as South Korean lenders, which are suffering from a dollar
shortage, have been increasingly reluctant to extend loans to smaller firms,
particularly amid the slowing economy and a global credit squeeze.
The group's total assets reached 315.2 trillion won as of the end of September,
up 17.6 percent from the previous year. Its net interest margin (NIM), a key
barometer of profitability, reached 3.5 percent as of the end of September,
compared with 3.49 percent in the second quarter.
Shinhan Bank logged a net profit of 214.3 billion won in the third quarter, down
32.2 percent from a year earlier. The bank unit's NIM rose to 2.1 percent in the
July-September period from 2.03 percent three months earlier.
Goodmorning Shinhan Securities Co., the brokerage unit of the group, posted a
loss for the first time in more than five years. The securities firm logged a
loss of 17.8 billion won in the third quarter, a turnaround from a profit of 48.2
billion won the previous year, the group said.
