Q2 Earnings of the Four Major Financial Holding Companies Also 'Good Good Good'

The four major financial holding companies?KB, Shinhan, Hana, and Woori?are expected to post net profits exceeding 4 trillion won in the second quarter, following the first quarter of this year.

According to financial information firm FnGuide on the 9th, the combined net profit of the four major financial holding companies for the second quarter is estimated at 4.426 trillion won. This represents approximately a 7% increase compared to the combined net profit of the four major financial holding companies in the second quarter of last year (4.1258 trillion won).

According to Daishin Securities, the net profit forecast for KB Financial Group in the second quarter of this year is 1.319 trillion won, the highest among the four holding companies. Shinhan Financial Group is expected to post 1.255 trillion won, Hana Financial Group 1.045 trillion won, and Woori Financial Group 807 billion won. KB Financial is expected to maintain its position as the top net profit earner through the second quarter, but the narrow gap with Shinhan Financial suggests the rankings could change by year-end. Park Hye-jin, a researcher at Daishin Securities, stated, "Shinhan Financial Group is expected to reclaim the title of number one in net profit for the first time in a while."

The four major financial holding companies have posted strong results this year despite a steady decline in household loans. The outstanding household loans of the five major commercial banks stood at 701.615 trillion won as of the end of May, down 1.3302 trillion won from the previous month. Household loan balances have decreased for five consecutive months, shrinking by about 8 trillion won this year alone. Although loan balances have decreased, interest income has not declined due to rising interest rates. The upper limit of mortgage loan interest rates at commercial banks is approaching 7% per annum, and the average interest rate on high-credit personal loans, which was in the 2% range last year, is now in the 4% range. Furthermore, while household loans have decreased, corporate loans have steadily increased by about 32 trillion won this year.

Strong performance is expected to continue in the second half of the year as banks' net interest margins continue to widen amid rising interest rates. KB Kookmin Bank's net interest margin in the first quarter of this year was 2.02 percentage points (p), up 0.16 p from last year, while Shinhan's was 1.87 p, up 0.19 p. Woori (1.83 p) and Hana (1.82 p) increased by 0.22 p and 0.21 p, respectively. However, the high dependence on interest income remains a challenge. Additionally, the interest rate spread disclosure system promoted by the Yoon Seok-yeol administration is also seen by some as a factor that could weigh on improvements in net interest margin (NIM).

This content was produced with the assistance of AI translation services.