Shinhan likely to keep leading group title this year

By Kim Bo-eun

Shinhan Financial Group appears likely to maintain its lead in earnings among the four major groups this year, after it unveiled 2.95 trillion won in accumulated net profit for the first three quarters of the year, Tuesday.

Its earnings for the third quarter alone, 1.14 trillion won, came second to KB Financial Group's 1.17 trillion won.

Shinhan and KB have engaged in cutthroat competition for the leading title. Shinhan took the throne as top financial group in the first quarter and first half of 2020 in earnings. KB ranked first in the second quarter.

KB and Shinhan both exceeded 1 trillion won in quarterly net profit for the first time, in the third quarter.

Shinhan beat KB in accumulated earnings for the first three quarters of the year, with 2.95 trillion in net profit. KB's net profit for the first three quarters of the year came to 2.88 trillion won.

Shinhan's net profit for the third quarter saw a 31.1 percent growth from the previous quarter.

"The group's earnings show Shinhan's sustainable growth trajectory, based on diversified revenue sources, such as overseas business," the group said.

According to Shinhan, earnings from non-bank affiliates centering on the brokerage unit and capital firm boosted overall earnings.

Shinhan said its brokerage and card firm's overseas business contributed significantly to earnings.

Shinhan Card saw its net profit grow 14.4 percent quarter-on-quarter to 470 billion won in the third quarter.

KB's net profit for the third quarter saw an 18.8 percent growth from 981.8 billion won of the previous quarter.

"The group maintained strong fundamentals and profitability based on diversifying revenue sources and managing risks under current economic circumstances," the group said.

The net interest margin fell amid lowered interest rates, but its earnings were boosted by a growth in loans and fees from its brokerage unit.

The earnings of KB's affiliates reflect this. KB Kookmin Bank's net profit for the third quarter stood at 635.6 billion won, down 3.8 percent from the previous quarter.

KB Securities' net profit, meanwhile, jumped 37.6 percent to 208.45 billion won from the previous quarter.

Hana ranked third among the four groups, posting 2.10 trillion won in accumulated net profit for the first three quarters of the year, a 3.2 percent year-on-year growth.

The group posted 760.1 billion in net profit in the third quarter, a 10.3 percent growth from the previous quarter.

The group said its earnings were boosted by non-banking affiliates, which accounted for 31.3 percent of the group's earnings. Hana's non-banking affiliates include its brokerage unit, capital firm, card company and insurer.

"The growth is also due to the expansion of online sales channels," the group said.

Woori's accumulated net profit for the third quarter came to 1.14 trillion won, a 31.54 percent contraction from earnings of the same period last year.

Its earnings stood at 480 billion won in the third quarter, a 237 percent growth from the previous quarter.

Woori said the vast growth is based on poor net profit in the second quarter, when various expenses incurred including loan-loss reserves and reserves for compensating victims for losses from financial products the lender sold.

Meanwhile, investors are hoping for a rise in the prices of the stocks of the four major banking groups, given their solid performances in the third quarter.

The stocks of the banking groups have also drawn attention in recent weeks based on dividends which will be paid at the end of the year.

Financial groups had reviewed expanding dividends by paying quarterly dividends instead of annual dividends as a means to boost lackluster stock prices, but appear to be holding back given directions from financial authorities over uncertainties surrounding COVID-19.

The price of stocks of the four banking groups on average rose 10.23 percent in the past month, which compares with a 1.18 percent rise in the KOSPI index in the same period.