Shinhan Financial's Overseas and Non-Bank Units Drive Growth Outlook
Shinhan Financial Group is rated Buy on expectations that international expansion and non-banking diversification will lift returns. The share of profit from outside Korea increased from a low-teens percentage in FY2023 to a high-teens level in FY2024-25. Key non-bank segments such as asset management and securities have posted annualized ROEs above 19% in the first half of the year, supporting a projected group ROE increase from 9% to 10% by FY2026.
Shinhan Financial Group, traded as SHG, has been viewed favorably by The Value Pendulum. The analyst points to two main growth engines: operations outside South Korea and businesses beyond traditional banking. Foreign earnings contributed a low-teens share of profit in FY2023, then reached a high-teens share across FY2024–25.
Within non-bank operations, asset management and securities stood out, with annualized returns on equity above 19% in the year’s first half. The author expects group ROE to rise from 9% last year to 10% by FY2026, which the author links to a richer price-to-book multiple.
If Shinhan’s overseas and non-bank growth lifts returns, customers in Korea and abroad may gain access to a wider range of financial services, while employees and communities could be affected by changing business priorities. Investors, including pension funds and individual savers, may benefit if stronger returns translate into improved financial performance, though results depend on execution and broader economic conditions.