新韩金融集团 (055550.KS): Shinhan Financial Group: Solid 3Q26 results with 3-month share buyback support; valuation merits re-emerge; OW

Shinhan delivered solid 3Q26 earnings with net profit of W1.6tn (+11% y/y, -13% q/q), broadly in line with market expectations. Despite 2bps NIM erosion, NII remained resilient on steady loan growth, while non-interest income weakened on subdued fees/trading gains; this was partly offset by better-managed SG&A and one-off gains. Credit costs came in lower than expected, alongside improved asset quality (NPL 0.78%, -1bp q/q; delinquency 0.29%, -5bps q/q). The group announced a 3Q DPS of W740 and an additional W450bn buyback for three-month execution (W200bn by year-end; W250bn by Jan-27), implying ~54% TSR on improved CET1 of 13.62% (+12bps q/q), with total 2026 buybacks reaching W1.6trn (+28% y/y). Management reiterated its mid-term 10-12% ROE target and expects the Lotte Insurance acquisition to be 20bps+ ROE accretive versus 19bps CET1 dilutive. After the recent pullback, valuation looks compelling at 0.6x 27E P/B against a ~10% sustainable ROE;