South Korea’s top Shinhan Financial Group Co. Thursday reported a net profit of 892 billion won ($792 million) in the second quarter and a historic-high of 1.9 trillion won for the first six months as both banking and non-banking units delivered robust income on top of its cost-cutting efforts.

Although net profit in the second quarter fell 10.5 percent from the previous three-month period, the combined net income for the early six months jumped 30 percent against a year ago, the country’s leading financial group said.

Shares of Shinhan Financial Group closed Thursday at 50,600 won, down 200 won or 0.39 percent from the previous session.

The best-ever performance by the 16-year-old financial group benefited largely from the low-interest environment that has fueled consumer loans and debt-financed spending and investment.

The group’s net interest margin - an indicator of profitability - rose for the second straight quarter to 2.02 percent.

Interest income in the first six months this year jumped 8.5 percent on year to 378.4 billion won due to jump in household lending.

Its key unit Shinhan Bank earned a net 1.1 trillion won, up 7.6 percent in the first half. The bank’s net interest margin during the second quarter improved for the second straight quarter to mark 1.56 percent.

The non-banking units including Shinhan Card and Shinhan Investment delivered their record first-half net profit of 865.3 billion won.

The group’s continued efforts on risk management were translated into nearly halving its bad loan cost to 310 billion won against a year ago period. The sharp fall was mainly contributed by Shinhan Bank whose provisions for bad debt fell 75.3 percent on year to 108.1 billion won in the January-June period.

Its efforts to cut operational spending such as sales and administrative expenses also paid off by bringing down the figure by 0.8 percent against a year earlier.

By Kim Tae-sung

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