Shinhan fourth quarter profit down 44% to $328mn

The lender still on hunt for CEO as acting Chair and CEO Ryoo Shee-yul is not included on the list.

Shinhan Financial Group Co., which lost three of its senior executives last year, Tuesday posted weaker-than-expected fourth quarter net profit and said the search for a new chief executive was inching forward.

On the same day Korea Exchange Bank released its results, Shinhan reported net profit of KRW364.36 billion ($328.11 million) for the quarter ended Dec. 31, down 44.1% from KRW651.99 billion ($587 million) in the previous three-month period when it booked gains from asset sales but up from KRW256.21 billion ($230.65 million) a year earlier. The fourth-quarter result was below the KRW481.77 billion ($433.7 million) net profit tipped by a Dow Jones Newswires poll of seven analysts.

Shinhan, South Korea's third-largest financial holding company by assets, said its operating costs rose in the fourth quarter.

The firm's fourth-quarter net interest margin, a key profitability metric for lenders, rose to 3.55% from 3.37% in the third quarter while its loan-loss provisions declined to KRW227.9 billion ($205.17 million) from KRW358.3 billion ($322.6 million) in the third quarter and KRW374.4 billion ($337.1 million) a year earlier, indicating strong fundamentals.

Separately, Shinhan Financial said Tuesday that a special committee of board directors had settled on a shortlist of four candidates for the chief executive post. The lender did not identify any of those candidates but a Shinhan official said acting Chairman and Chief Executive Ryoo Shee-yul isn't on the list.

Some analysts have said investors would prefer Shinhan to choose a candidate familiar with Shinhan's culture who won't cause too much disruption to the organization. However, IBK Securities analyst Lee Hyeok-jae said Shinhan's solid business operations will render the concerns moot.

View the full story in The Wall Street Journal.