The four major financial groups in South Korea are projected to achieve nearly 11 trillion won in net profit for the first half of the year, setting a new record. This strong performance is attributed to stable interest income maintained by banks despite total loan management and significant improvements in securities subsidiaries due to active trading in the stock market.
According to financial information provider FnGuide on June 24, the estimated net profit for KB, Shinhan, Hana, and Woori Financial in the second quarter is 5.5661 trillion won, marking a 3.38% increase compared to the same period last year.
As a result, the cumulative net profit for the first half is expected to reach 10.8949 trillion won, a 5.5% increase from the previous year and the highest on record for a half-year period.
By financial group, KB Financial is expected to report a net profit of 3.6346 trillion won for the first half, maintaining its position as the 'leading financial group.' Shinhan Financial is projected to achieve 3.1717 trillion won, while Hana Financial is expected to report 2.4596 trillion won, both marking their highest half-year results. In contrast, Woori Financial is anticipated to see a net profit of only 1.5269 trillion won due to negative growth in the first quarter.
This positive performance is driven by robust interest income and non-interest income resulting from a booming stock market. Although financial authorities have tightened household loan management, the growth rate of loans has slowed somewhat. However, high loan interest rates and stable net interest margins (NIM) have allowed interest income to remain steady.
Additionally, increased trading volumes in the domestic stock market and a recovery in investor sentiment have led to expanded brokerage and wealth management (WM) fee revenues. The improvement in trading profits due to a strong stock market has further boosted the overall performance of the financial groups.
Other non-bank subsidiaries, such as insurance and credit card companies, are also expected to maintain relatively stable results due to cost efficiency and improved asset management revenues. Analysts suggest that the financial groups' strategies to strengthen their non-bank portfolios, moving away from a bank-centric profit structure, have contributed to this performance improvement.
For the entire year, the four major financial groups are projected to achieve a net profit of 19.8189 trillion won, nearing the 20 trillion won mark. Notably, KB Financial is expected to surpass 6 trillion won in annual net profit for the first time, while Shinhan Financial is anticipated to exceed 5 trillion won.
* This article has been translated by AI.
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