South Korean banking behemoth Shinhan Financial said Wednesday its net profit slipped 7.7 percent on-year in the fourth quarter, the latest sign of weakening profitability at local lenders challenged by stiff competition and low interest rates.
  

Net income reached 313.1 billion won ($288.5 million) in the October-December period, compared with 339.1 billion won in the previous year, the financial group said in a press release.
  

Compared with three months earlier, the banking group's net profit nearly halved, falling below the 500 billion won threshold for the first time in a year.
  

The on-year decline was mostly attributed to sluggish profit at its flagship unit Shinhan Bank. The lender's fourth-quarter net profit tumbled 35.3 percent to 183.3 billion won.
  

The bank's net interest margin, the main gauge of profitability, reached 1.67 percent in the three-month period, sharply sliding from 1.79 percent a year earlier in line with falling lending rates.
  

Both borrowing and lending rates have been trending lower in Asia's fourth-largest economy since the central bank slashed the policy rate to a record-matching low of 2 percent to spur growth.
  

The financial group's overall assets totaled 406.7 trillion won in the fourth quarter, up 9.5 percent from the previous year.
  

Shares of Shinhan Financial ended at 45,700 won on Wednesday, adding 0.44 percent from the previous session. The benchmark KOSPI rose 0.55 percent.
  

The earnings were released after the market closing. (Yonhap)