Financial Holding Companies' H1 Net Profit 13.6238 Trillion KRW... Up 10.1% YoY

Domestic financial holding companies recorded profits exceeding 13 trillion won in the first half of the year. Non-interest income in the banking, financial investment, and insurance sectors increased, resulting in favorable performance.

According to the provisional consolidated management performance of financial holding companies for the first half of 2023, announced by the Financial Supervisory Service on the 26th, the net income of 10 domestic financial holding companies (KB, Shinhan, Nonghyup, Woori, Hana, BNK, DGB, JB, Korea Investment, Meritz) reached 13.6238 trillion won in the first half, an increase of 1.2462 trillion won (10.1%) compared to the previous year (12.3776 trillion won).

By subsidiary sector (based on individual net income), banking increased by 1.3172 trillion won, financial investment by 1.4977 trillion won, and insurance by 643.5 billion won, while other financial companies (cards, capital, savings banks) decreased by 564.3 billion won. The profit share by sector increased for financial investment (20.1%) and insurance (12.9%) but decreased for banking (54.4%) and other financial companies (9.9%).

The consolidated total assets of financial holding companies amounted to 3,477.5 trillion won, up 59.3 trillion won (1.7%) from the end of last year (3,418.2 trillion won). By subsidiary sector, assets of banking and financial investment increased by 43 trillion won and 40.5 trillion won respectively, and other financial companies increased by 2.1 trillion won, but total insurance assets decreased by 33.5 trillion won due to changes in accounting standards. The asset share by sector was highest in banking at 74.9%, followed by financial investment (10.4%) and other financial companies at around 6.7%.

Looking at capital adequacy indicators, as of the end of last year, the total capital ratio of eight bank holding companies was 15.75%, the Tier 1 capital ratio was 14.53%, rising by 0.14 percentage points and 0.2 percentage points respectively compared to the end of the previous year, and the common equity Tier 1 capital ratio increased by 0.24 percentage points to 12.83% during the same period.

The non-performing loan ratio of financial holding companies stood at 0.63% as of the end of June, up 0.14 percentage points from the end of last year. The loan loss coverage ratio, an indicator of loss absorption capacity, was 152.9%, down 17.6 percentage points from the end of last year.

The number of subsidiaries and affiliated companies under financial holding companies was 319, with 9 new companies added and 6 companies removed in the first half of this year, increasing by 3 companies compared to the end of last year (316 companies).

A Financial Supervisory Service official stated, "It is necessary to pay attention to the expanded increase in the non-performing loan ratio, which turned upward at the end of last year due to the overall rise in non-performing loans across the financial sector," adding, "We will strengthen risk management to prepare for external factors such as interest rate fluctuations and guide improvements in loss absorption capacity through sufficient provisioning."

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