SEOUL, KOREA - DB Daewoo Securities said on August 26 that Shinhan Financial Group would be able to post solid financial results for the time being and adjusted the target price upward to 61,000 won. Its investment opinion was maintained at "buy." Koo Yong-wook, KDB Daewoo Securities analyst, said, "The second-quarter net profit of Shinhan Financial Group was 577.6 billion won, with the solid performance continuing afterward."

 

"Even though its net interest margin slightly fell in the second quarter from the previous one, the absolute volume of net interests has increased due to a rise in assets," he added. The analyst projected that the financial group will continue its performance in the third quarter. Its gains on the sale of securities will decline from the second quarter, the growth pace of net interest margin will accelerate, with the selling, general and administrative expenses and the transfer to reserve for possible loan losses would be at a stable level. The third-quarter net profit is forecast to fall 3.9 percent from the previous quarter, but the level of 550 billion won would be maintained.

 

He further said, "Shinhan Financial Group is more stable than any other financial groups in terms of profitability. It can abundantly absorb one-time losses from the sale of securities. The favorable environment for the banking industry as a whole would be positive for the group's stock price."