Financial Holding Companies' Net Income in H1 Reaches 11.47 Trillion KRW, Up 50.3%

Total Assets Increased by 4.8% to 3,087 Trillion Won

[Asia Economy Reporter Park Sun-mi] Due to expanded interest income mainly in the banking sector and a booming stock market in the first half of this year, the net income of domestic financial holding companies increased by as much as 50.3%.

According to the Financial Supervisory Service on the 7th, as of the end of June this year, the combined total assets of 10 financial holding companies amounted to 3,087 trillion won. This is a 4.8% (141 trillion won) increase compared to 2,946 trillion won at the end of last year. By subsidiary sector, banks increased by 109.3 trillion won (+5.0%), financial investment by 7.1 trillion won (+2.3%), insurance by 2.6 trillion won (+1.0%), and credit finance companies, etc. by 16 trillion won (+9.2%). The asset ratio of subsidiaries by sector relative to the total assets of financial holding companies shows banks at 74.1%, the highest. Following are financial investment (10.3%), insurance (8.6%), and credit finance companies, etc. (6.1%).

The consolidated net income of financial holding companies in the first half reached 11.4671 trillion won, an increase of 50.3% (3.8351 trillion won) compared to 7.632 trillion won in the same period last year. By sector, banks recorded 1.4491 trillion won, up 26.5%, financial investment 1.6697 trillion won (+132.2%), insurance 410.2 billion won (+55.0%), and credit finance companies, etc. 671.5 billion won (+52.9%). In the banking sector, the increase in interest income, the base effect due to last year's provisions for loan losses and expenses related to private equity fund compensation, and in the financial investment sector, the expansion of commission income due to the stock market boom had an impact.

In the first half, the total capital, core capital, and common equity tier 1 capital ratios of financial holding companies were recorded at 15.55%, 14.19%, and 12.73%, respectively. Due to increased net income, the capital ratios rose by 0.92 percentage points, 1.00 percentage points, and 0.80 percentage points compared to the end of last year, exceeding regulatory ratios and demonstrating sound capital adequacy.

A Financial Supervisory Service official stated, "We plan to guide appropriate levels of provisions for loan losses, capital expansion, and internal reserves to enhance loss absorption capacity in preparation for uncertainties due to the end of COVID-19 policy support and changes in the market environment."

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