In addition, since YouTube only offers Korean language, please connect via Zoom and click English for English interpretation. Please refer to detailed connection instructions on our website. This will be a way for us to increase accessibility for our investors, so we will be looking forward to your interest. We will now begin Shinhan Financial Group 2021 Q3 business results presentation. We have here with us Group CMO, Heo Young-taeg, Group CDO, Lee Seong-yong, Head of Shinhan DS, Group CFO, Roh Yong-hoon, Group CSSO, Park Sung-hyun, and Group CRO, Bang Dong-kwon. We will first hear CFO Roh Yong-hoon's presentation on 2021 Q3 business results, and then engage in a Q&A session. I would like to invite CFO Roh Yong-hoon to cover 2021 Q3 business results.
Greetings. I am Shinhan Financial Group CFO, Roh Yong-hoon. Thank you for participating in our 2021 Q3 business results presentation. With COVID-19 vaccination rate achieving 70%, we have the upcoming with-COVID policy, but uncertainty is still high with concerns over stagflation and global supply network vulnerabilities. In this situation, we believe that our customer base and trust with our customers is important. From this perspective, Q3 business results seem to be meaningful performance generation. Let me start the business results presentation from page four, and cover the main highlights of 2021 Q3. First, according to our active digital transformation, we expanded our customer contact points in diverse age groups, and expanded our customer base. Due to the pandemic, unprecedented digital conversion is taking place in all industries.
Befitting Shinhan Group's new vision declared in September, more friendly, more secure, more creative financial services, and through digital transformation efforts that we have focused on for many years, in 2021, the bank and card platform's monthly average users had a 6.47 million YTD net growth, and recorded the highest growth rate in the industry. Excluding the overlapping customers between subsidiaries, the group's active users recorded 19.53 million, and realized the highest growth rate during the past three years. The ratio of cross-selling customers was 42.1%, a record high rate as well. We are focusing on securing customers in diverse age groups with special products, targeting the MZ generation. I will cover more details on digital through the following pages. Second is balanced profit structure.
Despite the market volatility increase, through our diversified profit structure, on a Q3 cumulative basis, we achieved KRW 3,559.4 billion of net income, a 20.7% increase YOY. Q3 net income posted KRW 1,115.7 billion. If there was a pronounced income growth of subsidiaries in the capital market in the first half of 2021, in Q3, with selective asset growth, the bank sector's interest income greatly increased, and strong income growth is being maintained in both bank and non-bank. In particular, bank's key asset quality is being very well-maintained, and with the NIM improvement, bank's interest income grew 9.3% YOY, and grew KRW 412.2 billion, posting KRW 4,841.1 billion.
Despite the market volatility increase, non-bank income rose 30.5% YOY, posting KRW 1,605.5044 billion, posting a record high cumulative net income. Third, through capital utilization and optimized allocation, we are maximizing ROE on a Q3 cumulative basis. Group ROE posted 10.98%, maintaining two-digit ROE. Based on our sustainable earnings fundamentals, we have been developing diverse shareholder return tools, including gradual increase of dividend payout ratio and quarterly dividends. In particular, in order to increase predictability for shareholder returns, we were the first financial holding company that implemented a quarterly dividend policy from the end of June this year. In order to consistently implement this policy, our BOD has decided this morning to pay Q3 quarterly dividends as of September 30th as the base date.
The BOD, taking into consideration that the quarterly dividend policy is being implemented during the year, and taking into account the situation of diverse interested parties following the increase of economic uncertainty, collected opinions that there could be an adjustment to the dividend amount, and decided on 261 EPS in Q3.
I will explain more later. Group's Q3 cumulative net income posted KRW 3,559.4 billion, and has already exceeded 2020 full year net income. With management of loan growth speed and through selective asset growth, interest income is increasing and basic fundamentals are improving. We are seeing the asset growth effect and margin improvement through interest re-pricing momentum, and we expect interest income increase to continue. Non-banking performance is also continuing to be strong. Despite the financial market volatility increase based on solid fundamentals, we are seeing remarkable income increase in non-banking, including card, capital, and asset management. With continued cost savings based on digital, Group's cost-to-income ratio posted 41.5% and is being stably maintained.
With the COVID-19 situation, the group's credit cost that the market was concerned about from 2020 is being very stably managed at 21 BP as of Q3, and the bank's credit cost also posted 80 BP at Q3 end, and is maintaining a record low level. In particular, we are reviewing the effect of volatility expansion in the real market and financial market on the group, and are managing risk and is thoroughly managing marginal companies, multiple-debt low-cost companies, exchange rate and price, and raw material-sensitive companies, and COVID-19 financial support programs. On the other hand, due to the Lime incident which occurred last year, we disappointed many of those who had trusted Shinhan. We established a new customer protection system in order for you to overcome this disappointment, and we are implementing customer trust recovery procedures according to the newly established standards.
As a result, Shinhan Investment Corp. decided to carry out private reconciliation for some investment products that were sold in the past, and recognized KRW 82.9 billion of non-operating expenses. We will do our best to resolve the product issues that were sold in the past as quickly as possible and focus our utmost efforts to recover customer trust. The level of recurring income, excluding the aforementioned non-operating expenses, are at the recurring income level in the previous quarter. From page six, I will explain about the group interest income, which greatly improved in Q3. The group's interest income YTD was increased by 10.2% YOY, and the quarterly interest income saw a net increase of 3% QoQ. Q3 NIM for the bank was 1.40%, the same level as in the previous quarter.
This is because the funding cost ratio has risen. As for the monthly NIM, corporate and household loan margins for the months of August and September all improved. Funding cost management, the effect of the August base rate hike, plus the loan margin improvement for a higher profitability, are expected to improve the bank NIM in the fourth quarter by 2-3 basis points QoQ. Next, let me address the issue of asset growth. Bank lending growth increased by 6.0% over the quarter, and the household sector increased by 3%. In terms of preemptive risk management in the household sector, we have been making preparations to moderate the growth rate of the household loan from the beginning of the year. We have focused on high-quality small and medium-sized enterprises and pursued a preemptive asset growth strategy.
As a result, the corporate loans increased by 9.1% YOY, leading the improvement in interest income. The target for this year's household debt management is 6%, and Shinhan Bank's household asset growth rate is managed within an appropriate limit, leaving no concerns about extra room for growth. Assets have grown mostly centered on mortgage and Jeonse loans, and the portfolio structure is improving with actual demand-driven funds. Credit growth is expected to be limited in 2022 as well, and we will maximize the efficiency of the limited resources. Please refer to pages seven to nine for detailed financial performance by item. Now, we will go straight to page 10 about the group's profit contribution and subsidiaries business performance. In the group's net income, the weight of non-bank profits QTD stood at 43.2%, up by 0.9 percentage point YOY.
Within the non-bank sector, capital market businesses such as financial investment and asset management accounted for 41% of the total, consumer finance such as cards 34%, and insurance, including life, accounted for 24%, showing even distribution. Looking at the operating income of the non-bank division, due to the high base effect of the previous year and increased volatility in the financial market, the GMS division's operating income decreased YOY, but GIB income increased by 25% YOY. Even the WM sector, which had contracted for some time, saw an increase in customer assets by KRW 5.4 trillion compared to the end of 2020. Returns on customers' assets are faring better than the benchmark, leading to gradual regaining in their trust.
Pensions operating income increased by 27.8% YOY, thanks to an increase in the bank's retirement pension reserves and higher margin on the IRP term deposit. The next page, 11, discusses our digital transformation. The digital transformation is progressing very rapidly. For example, from September 23rd, through the bank's SOL app, 100% non-face-to-face home mortgage loan execution is possible. Depending on various loan application scenarios, the customers are served through the best omnichannel suited to their needs and situation, whether it be loan center, digital sales, branches, et cetera, so that they can experience 100% seamless online process. Another advantage is multiple types of collateral properties, not only apartment buildings, but also multi-family houses and officetels, et cetera. Meanwhile, Shinhan pLay, the group's integrated mega pay platform, was launched on October 6th.
The daily average user for a week since the launch was 1.4 million, which is an increase of 22% compared to the previous three months. In addition, by establishing a credit evaluation model that is different from big techs, we're increasing our competitiveness. On September 29, we're the first Credit Card company to be granted credit information business approval for individual business CB. We're also actively expanding into new business areas through capital alliance, including Shinhan Bank's purchase of KRW 72.3 billion of Douzone Bizon's common shares. The two companies are in the process of converging their business models, and we have a plan to lead and pioneer new markets for SME business. Through various transformations, MAUs mainly focusing on the MZ generation are on the rise.
Bank saw MAU increase by 39% compared to last year's annual average, and MAU of Shinhan pLay is also increased by 66%, and the group platform MAU reaches 19.91 million people. Please refer to the document for digital coverage and profit generation and cost reduction from digital channels. Now moving on to page 12 about the group's ESG activities. Last September, we declared the ESG slogan of "Do the right thing for a wonderful world," and are pursuing Shinhan's unique ESG strategy. In line with the ESG strategy, we wish to actively manage the interest of stakeholders, including Shinhan's customers. The Group CEO was officially invited by the U.K. Climate Action Champion to attend COP26 in November in Glasgow, U.K.
He'll be sitting on the COP26 financing sector transition panel alongside influential leaders, including Paul Bodnar, Global Head of Sustainable Investing at BlackRock, and Michelle Scrimgeour, LGIM, CEO. We ask for your interest in and support for our leading ESG-oriented business activities. Page 13 summarizes major results of the group's mid- to long-term business strategy of Vision 2020s. The pages that follow lay out detailed performance descriptions of the group and its major subsidiaries and key management indicators. This concludes my presentation. Let's proceed with Q&A. Thank you very much.
Thank you. Now we will go ahead with the Q&A. If you have a question, please tap Raise Hand and unmute yourself on your Zoom screen. The same goes for those of you who wish to ask your question in English. All the questions will be simultaneously interpreted, and there is a bit of a latency until the questions are connected, so please hold. If you have any questions, you can tap Raise Hand button on Zoom and then unmute yourself.
[Non-English content] I am Park Sinyoung from Goldman Sachs. Can I ask a question?
Yes, Director Sinyoung Park from Goldman Sachs. Yes, please ask your question.
I have two questions. First question is about Shinhan Investment Corp. You mentioned that you recognize some of the expenses, operating expenses, and can you tell us about what they are, whether it's exposure, and how much of it was recognized compared to your plan, and can you elaborate on that? My second question is that this morning related to household loans, there was government announcement, and I think you have a great proportion in cards. For future asset quality, how much of an impact do you think you'll receive, and how are you going to respond to this change? Thank you.
Thank you very much, Director Sinyoung Park, and please hold until we can answer your questions. Thank you.
Thank you very much. Related to non-operating expenses of Shinhan Investment Corp., we will hear from Group CMO Heo Young-taeg.
I am CMO Heo Young-taeg, and we would like to express our deepest apologies for the losses because of our investment product. In the BOD of our group in August, they asked us and recommended to us to protect our customers and the group had a very firm commitment to protecting our customers. For nine investment products, we had private reconciliation by Shinhan Investment Corp. Of course, according to how much accommodation the customers will give us, the loss amount could be different. Referencing similar incidents in the past, we recognize the losses.
We are not sure when this will be confirmed, but through the recommendation of the BOD, we are showing our commitment to getting rid of the uncertainty and to more better protect our customers.
Thank you very much for your answer. The second question will be answered by our CRO, Bang Dong-kwon.
I am Bang Dong-kwon, the CRO. Thank you very much for your question. As you just mentioned, related to DSR strengthening policy, we had that announcement today. As you had said, we do expect some impact on the card industry. I believe that there are two important points. First, changing the DSR to 50% from 60% and to have six months ahead of what was planned. It is true that we have the largest amount of card loan assets, but we have had stable growth.
As was mentioned in the previous earnings release, we said that for July of next year, for the multiple borrowers and vulnerable borrowers and high borrowers, we had a special plan. To prepare for July of next year, we had been making preparations. If we make further preparations, of course, it will have some impact, but we believe that we could bear with the changes and the earlier date. Thank you very much.
Thank you very much for your answer.
The next question is from researcher Kim Jin-sang from Hyundai Motor Securities. Please go ahead. Please unmute yourself. We cannot hear you. Please unmute yourself. Please turn on your microphone. We cannot hear you.
Hello, can you hear me?
Yes, we can hear you.
I can't unmute myself on my mobile. I'm sorry about that. I have two questions. As for Shinhan Financial Group, you are very proactive in quarterly dividend. I think you're mentioning three things in your capital policy, consistently upgrading your payout ratio and continuing with your quarterly dividend, doing it regularly. About your share buyback cancellation, the market expectation is as follows. We expect that you will continue with your quarterly dividend, and you will continue to go up with your payout ratio, and I think your peers are doing that, so I don't think Shinhan will be an exception. As for share buyback and cancellation, I guess you cannot say for certain whether you will do it or not, but it is a big option.
Could you give us a guidance or a guideline as to, you know, what we can expect from you? Could you remind us of the three-pronged capital policies? Secondly, about the overseas business. Of course, there are uncertainties growing because of COVID-19, but, do you have a roadmap for overseas business' contribution to, the income? Thank you.
Thank you very much for your question. We will be right back with the answer, plese hold. Yes. As for the first question, CFO Roh Yong-hoon will respond.
Yes. Thank you for the questions. As for the capital policy, as for the quarterly dividend, as you're well aware, starting last year, we had shared with you the group's plan for a quarterly dividend. I know the circumstances are quite dire, but we are paying out the quarterly dividend, and it's the first of the financial holding companies. The meaning behind a quarterly dividend is our active commitment and firm determination for our shareholder value return policy. As for the payout ratio, as was mentioned earlier, last year, our target is to achieve 30%.
As for a share buyback and cancellation, we cannot confirm the price or the amount, but we do have the plan. As was mentioned in the previous quarter's earnings presentation, we do not have treasury shares, so we do need to buy back some. Through a BOD meeting in the near future, there will have to be a decision made on that.
Thank you very much.
As for your second question about overseas, Mr. Heo Young-taeg, the CMO will respond.
Yes. Hello, I am Heo Young-taeg. As for the Global Business strategy, due to COVID-19, even despite the COVID-19, there isn't much of a big difference. Our group's income comes from Japan, Vietnam, China, the U.S. The Vietnamese market is under lockdown, and that's why the growth is a bit stagnant.
In the global markets, we have recognized the provisioning preemptively. Starting next year when there is recovery and we slowly grow out of COVID-19, then the countries that I mentioned will recover. In the advanced countries, I don't think there will be much of a difference next year. 20% of our operating income will come from global. Of course, there may be a time lag because of COVID-19, but this is what is underlined in our fresh 2020s strategies, and we'll be moving in that direction. Starting next year, the Global Businesses that we are present in will be more profit-oriented, and we will strengthen our strategy in that direction. We will also pursue organic and inorganic growth opportunities. Starting next year, we will be able to show you good results. That is our expectation. Thank you.
Thank you for your answers. We will take the next question from JP Morgan, Cho Jihyun. Please. Cho Jihyun, please.
Thank you for the opportunity, and I have two questions. First question is the mortgage, which is possible 100% through online. We believe that 100% is quite difficult to achieve in trying to file, submit, and get mortgages. Are they really 100% online mortgage submissions? There are apartments or other types of housing that it is very hard for the government to give evaluations. Can you tell us to what extent you are talking about? I'm sure that for assets that could not be covered through the previous loans, how could they be covered? Second question is about digital.
I believe that compared to other financial holdings groups, in terms of business platform or your digital platform, you have quite uniqueness, and you bought the shares for Douzone Bizon, and you have online launchpad services that you're going to launch. At the end of the day, can you tell us about the business platform or partnership direction you have for the long term? Can you tell us about what kind of synergy you can create with your existing subsidiaries or business? When do you plan to launch your business services that will have synergy in those aspects as well?
Please hold until we answer your questions. Thank you. [Non-English content] The first question will be answered regarding mortgage loans by our CMO, Heo Young-taeg.
For online mortgage loans, in September we launched those services to get the mortgage loans online. However, we were not able to actively market them because of some issues including household loans. There could be a concentration effect to us if we had marketed them actively, so we did not have active promotion. Through many internal efforts, 100% online mortgage loans have become possible. 100% non-face-to-face or online means that for the customers, it is 100% non-face-to-face. Some processes internally have to be done by our employees, but for the customers, it is more convenient for them, and it is 100% online process for them. Compared to our competitor banks, in the LTV or DSR or other areas where this can be applied, the coverage is much higher.
However, as you are well aware, because we have household loan regulations and others, and because of the uneven concentration effect, we couldn't market them aggressively, but we hope to explain in more detail later. Going forward, for household loan products or retail products, we will do our best to increase customers' convenience, and we will continuously work hard so that they can be made online, non-face-to-face.
I will add to the answer, and I am the CDO, Lee Seong-yong. As was mentioned by our CMO, it is true that it is near 100% for online, and I think to the bank as well, almost all of it is handled in that manner. For digital, on September 13th, we had almost a one-hour presentation with CLSA and we have more detailed material.
If you need the material, we would be happy to send them to you. At the end of the day, we are thinking of two platforms or platforms in two perspectives. First, as a basis of financial platform. Intuitively, there are different platforms, but there are best-in-class financial platforms like Shinhan's that will only collect the best ones. However, we are pursuing two track. First is platforms for transactions, and second are platforms for the traffic. For transactions, because of legal repercussions, we are going to strengthen them with MyData later in the year. For the traffic platform, even if we want to make them 100% financial, they are lifestyle platforms like Kakao or others, and we need to make them more fun, but it is quite difficult.
TODP and other partnerships exist with us so that we can have better strategies, so that we can have alliance model in these traffic platforms. Douzone Bizon shares were acquired and we could use that. Or there is the delivery app or the health app that we will launch. From early next year, you can look for them because they will be launched at that time.
Thank you very much for your answer. The next question is from HSBC, Won Jiyoung, please.
Congratulations on a good quarter. I have two questions. One is, as for the quarterly dividend, it's a bit lower than the previous quarter. Is there a specific reason why? It seems like the quarterly dividend is volatile, so should we expect that going forward? As for the Shinhan Financial Group, the holding company provisioned against the mis-sales of the products, will this be over by Q3, or will there be additional cost in the later quarters?
Thank you very much for the questions. We'll be right back with the answer. The first question about the quarterly dividend will be answered by the CFO, Mr. Roh Yong-hoon.
Yes. As for the DPS. Yes. The quarterly dividends, in order to enhance predictability, it is our aim to have equivalent amount for the quarterly dividend, and we will determine the methodology, internally. As for this year, we are implementing the quarterly dividend within the quarter. As was mentioned in the previous quarter, the market situation itself is quite uncertain, and the BOD is trying to watch the market and is taking many factors into account. I hope that you can understand it.
Of course, the future plan for the financial holding company for higher predictability, we will have a payout of equivalent amount in the following quarters.
The second question will be answered by the CMO, Mr. Heo Young-taeg.
Yes. Thank you for the question. As for the Gen 2, the payment date was rolled over. It was extended. But in terms of consumer protection and to provide them with more liquidity, we have provided them with a payment to provide them with liquidity. Even after Q3, as was mentioned earlier, the financial company is strengthening consumer protection. In order to eliminate the uncertainties in the next year, in Q4, there may be additional losses recognized.
As for the dispute settlement meetings, we believe that some of the losses will be recognized, but this year's overall cost will not be higher than the cost recognized last year. This will not affect much our performance, and it will not deviate much from the market consensus.
Thank you very much. We do not have any hands up at the moment. We will wait for further questions. If you have a question, please tap Raise Hand on your Zoom screen and unmute yourself. Please hold.
It seems that there are no other questions in the queue. With this, we will conclude Shinhan Financial Group's Q3 2021 business results. We will see you at the next business results presentation with better results. Please revisit our website or YouTube channel for this business results presentation. Thank you very much.