Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Record earnings boost Shinhan back to No. 1 rank after 3 years
By Yi Whan-woo
By Yi Whan-woo
Shinhan Financial Group headquarters in central Seoul / Korea Times file
Shinhan Financial Group posted record earnings for 2022 to outperform its rival KB Financial and claim the industry's top position by market capitalization for the first time in three years.
In a regulatory filing, Wednesday, Shinhan Financial Group said its net profit last year came to an all-time high of 4.64 trillion won, up from its previous record of 4.19 trillion won set in 2021.
The firm's 2022 net profit was higher than the 4.41 trillion won posted by KB Financial Group for the same year. Announced in its respective regulatory filing, Tuesday, KB Financial Group's net profit also marked an all-time high for the company.
By categories, the interest income of Shinhan Financial Group jumped 17.9 percent year-on-year to 10.6 trillion won and that of KB Financial Group went up 18.9 percent year-on-year to 11.3 trillion won.
Their commission incomes, however, saw year-on-year declines ― down 5.6 percent for Shinhan Financial Group and 8.4 percent for KB Financial Group.
“We remained sluggish when it came to income other than interest margins, but even so, we continued to make profits overall,” Shinhan Financial Group said.
Among its major subsidiaries, the net profit of Shinhan Bank rose 22.1 percent year-on-year to 3.45 trillion won. The net profit of Shinhan Investment Corp. went up 28.6 percent year-on-year to 412.5 billion won while that of Shinhan Life Insurance rose 18.4 percent year-on-year to 463.6 billion won.
KB Financial Group headquarters in central Seoul / Korea Times file
For KB Financial Group, the net profit of KB Kookmin Bank increased 15.6 percent year-on-year to 2.99 trillion won and that of KB Insurance grew 84.8 percent to 557.7 billion won.
Concerning quarterly performances, KB Financial Group outpaced Shinhan Financial Group in the final three months of 2022.
KB's net profit shrank 39.51 percent year-on-year to 385.4 billion, as compared to Shinhan's that decreased 28.9 percent year-on-year to 326.9 billion won.
With the 2022 performance, Shinhan Financial Group renewed its net profit record for the fifth consecutive year and KB Financial Group did so for the third year straight.
Their record earnings last year are attributable to steep rate hikes delivered by the Bank of Korea, which increased its policy rate by a combined 3 percentage points between August 2021 and January this year.
Under the circumstances, the two as well as other smaller banking groups are under pressure to share their profits voluntarily with society as a part of efforts for joint prosperity.