Shinhan Financial Group Co. on Friday said its first-quarter net profit dropped by 5 percent on increased costs to pay compensation for a mishap in sales of equity-linked securities.

Its net profit reached 1.32 trillion won (US$970 million), down 4.79 percent from a year earlier, the company said in a regulatory filing.

Operating profit for the January-March period rose 17.8 percent on-year to 2.06 trillion won. Revenue increased 6 percent to 20.12 trillion won.

Shinhan Financial said it set aside some 274 billion won in reserves for the compensation of incomplete sales involving equity-linked securities products tracking Hong Kong’s H Index, which led the company to rack up a non-operating loss of 278 billion won in the first quarter, a shift from a non-operating income of 100 billion won.

Its interest income rose 9.4 percent on-year to 2.82 trillion won in the first quarter, with its non-interest income rising 0.3 percent to 1 trillion won.

The group’s net interest margin, the difference between inter
est received and paid, came to 2 percent in the first quarter, up from 1.97 percent a year earlier.

Source: Yonhap News Agency