Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
KB beats Shinhan in 1st half earnings to retain top position
Headquarters of Korea's four major financial holding firms ― KB, Shinhan, Hana and Woori. Courtesy of each firm
By Lee Min-hyung
By Lee Min-hyung
KB Financial Group outperformed Shinhan Financial Group in first-half net profits on the back of increased interest revenues and the solid growth of non-banking affiliates, regulatory filings from the two companies showed Thursday.
According to data from the nation's top two financial holding firms, KB raked in a net profit of 2.99 trillion won ($2.34 billion) in the first half, up 12.2 percent from the previous year. Shinhan reached 2.62 trillion won, down 2.1 percent during the same period.
Both companies expanded their allowance for bad debts amid rising delinquency rates, but KB defended against the earnings fall, with KB Kookmin Bank achieving better-than-expected interest profits than its archrival.
Shinhan attributed the earnings fall to the rise in its bad debt allowance and selling, and general and administrative expenses (SG&A) amid inflationary pressure.
“KB has proven its robust group-wide fundamentals despite a difficult sales environment stemming from the slowdown in the real economy and a sense of unrest surrounding the overall financial market,” a spokesman at KB said. “But we will face downward pressure in the net interest margin in the second half, so KB will focus more on driving growth in our non-banking and non-interest businesses.”
Hana Financial Group, the third-largest financial holding firm by market capitalization here, reported double-digit growth in its net profit between January and June. The company chalked up 2.02 trillion won in net profit, up 16.6 percent from the previous year. This marks the first time that the firm's earnings topped 2 trillion won in the first half.
The company explained the earnings growth was driven by its healthy expansion in non-banking and corporate lending businesses. Of note is Hana Bank's net profit of 1.83 trillion won, up 33.9 percent, from the previous year.
Hana piled up bad debt allowance worth 777.4 billion won in the first half, up 84.1 percent, in its preemptive bid to brace for lingering macroeconomic uncertainties here and abroad, the company said in a regulatory filing.
Woori Financial Group also reported a first-half net profit of 1.54 trillion won, down 12.7 percent from the previous year. The company pledged to tighten its risk management capabilities and focus on securing competitiveness in corporate financing to generate better earnings results.
Powered by the stronger-than-expected earnings growth, stock prices of the major financial holding firms closed with solid gains. Shares of KB Financial Group closed up 4.23 percent at 51,700 won per share. Shinhan shares achieved gains of 5.24 percent despite the relatively weak earnings reported. Shares of Hana and Woori also rallied 4.57 percent and 3.14 percent, respectively on Thursday.