Shinhan Financial Q2 CET1 to Rebound to 13.4%, But Lotte Insurance Deal Risks Capital Pressure

According to Yonhap Infomax on July 9, Shinhan Financial's Common Equity Tier 1 (CET1) ratio is expected to rebound to around 13.4% in the second quarter. However, the proposed acquisition of Lotte Insurance—valued at over 1 trillion Korean won—poses a significant risk to the capital ratio, potentially pushing CET1 below the 13% threshold when accounting for post-acquisition capital raising requirements. Market observers are focusing on how Shinhan will balance its new shareholder return formula, which targets a CET1 ratio of 13%, non-banking business growth, and a payout rate above 50%, with the capital demands of the acquisition.
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