4 banking groups earn W3.2 tril. in Q3

By Park Jae-hyuk

The nation's top four financial groups collectively posted 3.2 trillion won ($2.7 billion) in net profit in the third quarter, up 8.5 percent from a year earlier, according to the banking groups, Wednesday.

Shinhan Financial Group retained its leading status with net earnings of 981.6 billion won while KB Financial Group followed with 940.3 billion won.

Hana and Woori financial groups earned 836 billion won and 486 billion won, respectively.

Hana showed the highest growth rate of 41.8 percent, thanks to earnings from the sale of its headquarters building in Myeong-dong, downtown Seoul.

The banking group, which regained its status as the third-largest player in the second quarter, surpassing Woori, which took third place in first-quarter earnings, has widened the gap with its rival.

Woori's net income declined 18.7 percent from a year earlier, showing the worst performance since it launched a holding company earlier this year.

Compared with the second quarter, the collective net income of the four groups dropped 0.4 percent after non-interest income fell 14.7 percent to 2.51 trillion won.

Woori and Hana suffered 29.2 percent and 23.2 percent declines, respectively, while Shinhan and KB showed 9.8 percent and 5.9 percent drops.

The downturn is attributable to the poor performance of their brokerage units due to unfavorable financial market conditions and the worsening profits of their insurance units because of low interest rates.

In addition, their bank units could not earn enough from commissions due to sluggish investment.

Their interest income, on the other hand, reached an aggregate 7.86 trillion won, up 4.2 percent from a year earlier and up 1.3 percent from the previous quarter.

This showed the banking groups have become more dependent on interest income.

In competition among their banking units, KEB Hana Bank took top spot with a 757.5 billion won net profit, up 36.7 percent from the previous quarter, backed by 320 billion won from the sale of the Myeong-dong headquarters building.

KB Kookmin Bank and Shinhan Bank posted 701.6 billion won and 694.4 billion won in net income, respectively.

Woori Bank's net earnings fell to 60.1 billion won from 560.3 billion won a year ago, because Woori Card, which had been the bank's subsidiary, became the holding company's subsidiary.

All four banks' net interest margins (NIMs) were lower than in the second quarter.

NIM, the difference between what a bank receives from loans and what it pays for deposits, is considered a measure of profitability.

KB Kookmin's NIM was 1.67 percent, down 0.03 of a percentage point from the previous quarter. Shinhan's figure dropped 0.05 of a percentage point to 1.53 percent.

KEB Hana and Woori saw their figures drop 0.07 of a percentage point and 0.09 of a percentage point, respectively, to 1.47 percent and 1.4 percent.