Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Shinhan defending 'leading bank' title from KB
By Park Jae-hyuk
By Park Jae-hyuk
Shinhan Financial Group will likely maintain its position as the nation's top financial group for three consecutive quarters, as it is expected to beat out its competitor KB Financial Group by a narrow margin in second-quarter earnings, analysts and brokerages said Thursday.
They also said Hana Financial Group will regain its status as the third-largest player, surpassing Woori Financial Group which took third place in first-quarter earnings.
According to online market research service provider FnGuide, the market consensus among domestic securities firms showed that Shinhan will post a second-quarter net profit of 976.3 billion won ($826 million), up 3 percent from a year earlier.
KB's quarterly net income is estimated at 943.2 billion won, down 0.4 percent year-on-year.
The two giant banking groups have engaged in a fierce battle over the past few years to win the “leading bank” title. Before Shinhan recouped the top spot in the fourth quarter of 2018, KB had maintained the lead for six consecutive quarters.
Analysts cited Shinhan's aggressive M&A strategy as the key reason for the bright outcome.
Unlike KB which has been taking a cautious approach on business expansion recently, Shinhan finished acquiring Asia Trust and the Prudential Vietnam Finance Company this year. It also took over Orange Life Insurance from MBK Partners in 2018.
Shinhan's subsidiaries are expected to contribute to the group's robust financials, considering that Orange Life posted a net profit of 80.4 billion won in the first quarter of 2019 and Asia Trust posted a net profit of 28.2 billion won for 2017.
“Shinhan has hit record-high earnings every year since 2014,” Eugene Investment & Securities analyst Kim In said. “It is expected to post more record-high earnings this year, following the acquisition of Orange Life Insurance, an increase in interest and non-interest earnings and a decrease in selling and administrative costs.”
He added the group will continue to differentiate itself from its rivals in the second half of 2019.
Meanwhile, in the third-place match, Hana is expected to outrun Woori.
The market consensus showed Hana will post a 645.6 billion won net profit, while Woori's net profit is estimated at 585 billion won.
“Hana will show an improvement in its second-quarter performance, as its foreign currency translation losses have decreased during the quarter,” IBK Investment & Securities analyst Kim Eun-gap said.
Starting from KB which plans to unveil its actual quarterly earnings report July 18, Woori, Shinhan and Hana are set to announce their second-quarter results on July 22, 25 and 26, respectively.