'Record-Breaking Performance' of 4 Major Financial Holding Companies, Social Contribution Investments Slow Down

[Asia Economy Reporter Song Hwajeong] Although the four major financial holding companies achieved record-breaking performance last year, their social contribution investments have declined.

According to the 2021 ESG (Environmental, Social, and Governance) reports of the four major financial holding companies on the 3rd, the total social contribution investment of the four major financial holding companies last year amounted to 692.5 billion KRW, a decrease of more than 50 billion KRW compared to the previous year.

KB Financial Group's social investment last year was 189.6 billion KRW, down from 227.9 billion KRW the previous year. Shinhan Financial Group's social contribution investment, which exceeded 200 billion KRW the previous year, decreased to 174.9 billion KRW last year, and Woori Financial Group slightly decreased to 192.1 billion KRW from 197.8 billion KRW the previous year. Only Hana Financial Group increased to 135.9 billion KRW from 117.9 billion KRW the previous year.

Considering that the four major financial holding companies achieved record profits last year and emphasized expanding social contributions to dispel the negative perception of "interest business," this level of social contribution investment falls short of expectations. The combined net profit of the four major financial holding companies last year was 14.5429 trillion KRW, a 34.5% increase compared to the previous year. KB and Shinhan each recorded net profits exceeding 4 trillion KRW, while Woori and Hana also surpassed 3 trillion KRW.

In contrast to the decrease in social contribution investment, the dividend payout of the four major financial holding companies last year increased by nearly 800 billion KRW to 3.187 trillion KRW from 2.2928 trillion KRW the previous year.

There are calls for further expansion of social contributions to alleviate the negative perception that the record profits are due to interest business. In light of this, financial holding companies have recently been emphasizing ESG management more strongly. KB Financial Group Chairman Yoon Jong-kyu said at the group's second half management strategy meeting last month, "Although the situation is difficult, let us faithfully fulfill our social responsibilities as a leading financial group through financial support for climate change response and ESG consulting for small and medium-sized enterprises." Woori Financial Group Chairman Sohn Tae-seung also identified ESG management as one of the key tasks to focus on in the second half during the group's management strategy workshop.

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