(ATTN: ADDS group's capital increase plan in last 4 paras)
SEOUL, Feb. 12 (Yonhap) -- Shinhan Financial Group Co., a major South Korean banking group, said Tuesday its net profit reached a record high last year on the back of a surge in interest income.
Net profit rose 8.2 percent in 2018 on-year to stand at 3.16 trillion won (US$2.81 billion) on a consolidated basis, beating the previous high set in 2011, when the yearly profit came to 3.1 trillion won, the group said in a release.
The solid performance is mainly attributable to a 9.4 percent surge of its interest income on-year to 8.58 trillion won, according to the financial group.
Its net interest margin (NIM), a measurement of profitability, stood at 2.1 percent as of the end of last year, up 0.04 percentage point on-year.
The flagship Shinhan Bank reported a net profit of 2.28 trillion won last year, up 33.1 percent from the previous year, according to Shinhan Financial.
Meanwhile, the financial group decided on Tuesday to issue around 700 billion won worth of convertible preferred stocks, or around 17.5 million shares, to raise new capital.
The paid-in capital increase is planned for the first quarter of this year, according to company officials, adding that the move is intended to beef up its financial capabilities to implement a set of business plans, such as the takeover of non-banking entities.
Last year, Shinhan Financial obtained a controlling stake in the country's life insurer, Orange Life Insurance Ltd., formerly known as ING Life Insurance, as well as a real estate investment trust firm, Asia Trust Co., for around 2.5 trillion won combined.
"The rights offering is expected to ease market concerns over the group's financial stability after the large mergers," a Shinhan official said, stressing its push to further boost its non-banking sector.
Samsung BioLogics case to affect market, delisting unlikely: experts
October rout worst setback for S. Korean bourse in decade
Deregulation brightens prospects for Internet-only banks
Fat-finger fiasco penalty to have long-term impacts on Samsung Securities: experts
(News Focus) All eyes on Samsung's stock split, impact on share value