Financial Holding Companies' Net Income of 21.5 Trillion Won... 1.3% Increase Compared to Previous Year

Banks, Insurance, and Credit Card Companies See Profit Increase While Financial Investments Experience Profit Decline

As of the end of last year, the total consolidated net income of 10 financial holding companies (KB, Shinhan, Nonghyup, Hana, Woori, BNK, DGB, JB, Hantoo, Meritz) was recorded at 21.4722 trillion KRW, showing a 1.3% increase compared to the previous year (21.189 trillion KRW).

By sector, banks increased by 1.8571 trillion KRW (14.6% increase), insurance by 301.3 billion KRW (14.9% increase), and credit finance companies and others by 76.2 billion KRW (2.1% increase). Financial investment decreased by 543.9 billion KRW (10.8% decrease). Looking at the profit share by sector, banks (53.0% → 57.1%) and insurance (8.4% → 9.1%) increased, while financial investment (20.9% → 17.5%) and credit finance companies and others (14.7% → 14.2%) decreased. The number of subsidiaries and affiliated companies under the 10 financial holding companies was 316.

According to data released by the Financial Supervisory Service on the 9th, the total consolidated assets of financial holding companies at the end of last year were 3,418.2 trillion KRW, an increase of 214.9 trillion KRW compared to the end of the previous year (3,203.3 trillion KRW). By subsidiary sector, banks increased by 177.4 trillion KRW (7.4% increase), financial investment by 1.7 trillion KRW (0.5% increase), and credit finance companies and others (including savings banks) by 28.5 trillion KRW (14.0% increase), while insurance decreased by 2 trillion KRW (0.8% decrease).

The total capital, Tier 1 capital, and common equity tier 1 (CET1) capital ratios of bank holding companies were 15.59%, 14.32%, and 12.58%, respectively. Despite an increase in retained earnings, the CET1 capital ratio fell by 0.15 percentage points due to valuation losses on available-for-sale securities in other comprehensive income. On the other hand, the Tier 1 capital ratio slightly increased by 0.06 percentage points due to the issuance of hybrid capital securities, and the total capital ratio remained the same as the previous year.

The non-performing loan (NPL) ratio of financial holding companies rose by 0.02 percentage points to 0.49% compared to 0.47% at the end of the previous year. The loan loss coverage ratio increased by 14.6 percentage points to 170.5% from 155.9% at the end of the previous year.

Financial holding companies experienced a slight slowdown in asset growth compared to the previous year due to worsening domestic and external economic conditions and rising interest rates (8.7% in 2021 → 6.7% in 2022). Although fee income in the financial investment sector declined due to the stock market downturn, strong interest income growth in the banking sector led to solid performance (21.2 trillion KRW in 2021 → 21.5 trillion KRW in 2022).

However, the slight increase in the NPL ratio compared to the previous year calls for attention to the potential expansion of credit losses in the future. The NPL ratio of financial holding companies was 0.49% at the end of last year, up from 0.47% at the end of 2021.

The Financial Supervisory Service stated, "We plan to strengthen risk management guidance in preparation for risks such as increased volatility in global financial markets and asset quality deterioration due to vulnerable borrowers and real estate project financing (PF) loans." It added, "We will also review the management system for group risk factors such as overseas investments, high-risk exposures like real estate PF, and joint investments in alternative investment assets among affiliates."

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