Banks Lead, Securities Push... Four Major Financial Groups Hit Record High Q1 Net Profit of 5.3 Trillion Won (Comprehensive)

South Korea's four major financial holding companies recorded a combined net profit of over 5 trillion won in the first quarter of this year. As rising interest rates coincided with a bullish stock market, not only did net interest income increase, but non-interest income and the performance of their securities subsidiaries also improved, resulting in the highest quarterly results ever recorded.

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According to the financial sector on April 24, the combined net profit for the first quarter announced by the four major financial holding companies-KB Financial Group, Shinhan Financial Group, Hana Financial Group, and Woori Financial Group-was 5.3288 trillion won, up 8.1% from 4.9289 trillion won in the same period last year.

KB Financial Group saw the largest increase, with first-quarter net profit reaching 1.8924 trillion won, up 11.5% from a year earlier. Shinhan Financial Group also recorded a net profit of 1.6226 trillion won, an increase of 9% during the same period. Hana Financial Group posted 1.21 trillion won, up 7.3%. Both KB Financial Group and Shinhan Financial Group achieved their highest-ever quarterly results. Hana Financial Group also posted its highest performance since its merger with Korea Exchange Bank in 2015. In contrast, Woori Financial Group was the only one to see a decline, with net profit falling 1.9% year-on-year to 603.8 billion won.

This improvement in performance was supported by solid growth in net interest income. The four financial groups’ net interest income in the first quarter was 11.1674 trillion won, up 4.9% from 10.6419 trillion won a year ago. The breakdown was: KB Financial Group 3.3348 trillion won, Shinhan Financial Group 3.0241 trillion won, Hana Financial Group 2.5053 trillion won, and Woori Financial Group 2.3032 trillion won. The increase in net interest income was the result of a rise in loan assets centered on corporate loans despite a decrease in household lending, along with an improvement in net interest margin (NIM) as market interest rates pushed up lending rates.

At the same time, the stock market rally sharply boosted non-interest income, further driving the improvement in overall performance. In the first quarter, total non-interest income for the four financial groups reached 3.8773 trillion won, up 36% from 2.7776 trillion won in the same period last year. KB Financial Group and Shinhan Financial Group both surpassed 1 trillion won, recording 1.6509 trillion won and 1.1882 trillion won, respectively. Hana Financial Group posted 583.6 billion won, and Woori Financial Group 454.6 billion won. This was largely attributable to a significant increase in fee income from capital market subsidiaries such as securities firms, as well as asset management fees at banks, thanks to the bullish stock market.

The combined first-quarter net profit of the four major banks, the core subsidiaries of each financial group, was calculated at 3.8843 trillion won. Shinhan Bank led the group with 1.1571 trillion won, followed by Hana Bank with 1.1042 trillion won, KB Kookmin Bank with 1.101 trillion won, and Woori Bank with 522 billion won. KB Kookmin Bank, which reclaimed the leading bank position last year, dropped to third place in this quarter’s results. Woori Bank was the only one among the four to see a decline, with a 16.2% year-on-year decrease.

All four financial groups saw remarkable growth in their securities subsidiaries. KB Securities, driven by a surge in stock trading volume, posted 347.8 billion won, up 93.3% from a year earlier. Shinhan Investment Corp. also rose to 288.4 billion won, an increase of 167.4% over the same period. Hana Securities recorded 103.3 billion won, up 37.1%, and Woori Investment Bank soared to 14 billion won, a 1,300% increase year-on-year.

In terms of the Common Equity Tier 1 (CET1) capital ratio, a key indicator of financial soundness, the figures were: KB Financial Group 13.63%, Shinhan Financial Group 13.19%, Hana Financial Group 13.09%, and Woori Financial Group 13.6%.

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