South Korea’s four largest banking groups reported record-high combined earnings in the first quarter, approaching 5 trillion won ($3.48 billion) despite a broader economic slowdown and declining interest rates.
Shinhan Financial Group on Friday posted a net profit of 1.49 trillion won for the January-March period, up 12.6 percent from a year earlier and marking its highest-ever first-quarter result.
“Despite heightened economic volatility at home and abroad, we delivered solid results on the back of strong banking performance and a recovery in earnings at non-banking units,” a Shinhan official said.
The company attributed its solid operating profit to efficient asset-liability management, such as lower funding costs, and asset growth driven by corporate lending.
Shinhan’s earning result came a day after KB Financial Group reported the industry’s highest quarterly net income of 1.7 trillion won, a 63 percent surge from a year earlier. The increase was largely fueled by a 163.5 percent jump in net profit at its banking unit, which reached 636.9 billion won.
KB said the sharp improvement reflected the unwinding of large provisions set aside early last year for losses tied to Hong Kong stock-tracking ELS products, along with stronger returns from securities investments amid a market recovery.
Coming in third was Hana Financial Group, which posted 1.13 trillion won in net profit, reflecting a 9.1 percent on-year growth and marking the group’s highest first-quarter earnings.
All three companies maintained stable interest revenue, with increased blue-chip lending offsetting the impact of lower market rates.
Woori Financial Group was the only one among the four banking giants to report a decline in net profit, posting 615.6 billion won for the first quarter, down 25 percent from a year earlier.
Woori attributed the drop primarily to one-time expenses, including investments for future growth initiatives and an increase in general and administrative costs.
However, the company highlighted that improved interest and non-interest revenues — up 0.04 percent and 2 percent, respectively — demonstrated strong fundamentals.
Woori’s banking unit posted a net profit of 633.1 billion won, which exceeded the group’s total, but still marked a 20 percent decline from a year ago. In comparison, Shinhan Bank reported a 21 percent on-year increase in net profit, reaching 1.13 trillion won, while Hana Bank’s net profit grew 18 percent to 992.9 billion won.
Overall, the four groups posted a combined total of 4.93 trillion won, marking their highest-ever quarterly record, up 16.7 percent from the first quarter of 2024.
The four groups also outlined their shareholder return efforts, with first-quarter dividends per share set higher than the previous year. KB Financial’s dividend was set at 912 won, Shinhan’s at 570 won, Hana’s at 906 won and Woori’s at 200 won.
jwc@heraldcorp.com
