KB beats Shinhan in Q1 earnings in rivalry for top position

By Yi Whan-woo

KB Financial Group led Shinhan Financial Group in earnings for the first quarter of the year, after allowing its archrival to claim the industry's top position last year for the first time in three years.

In a regulatory filing, Thursday, KB Financial Group said its net profit amounted to 1.49 trillion won ($1.1 billion) in the January-March period, up 2.5 percent from a year earlier.

The firm's quarterly net income was higher than Shinhan Financial Group's which inched up 0.2 percent year-on-year to 1.38 trillion won.

In 2022, Shinhan Financial Group reaped an all-time-high yearly net profit of 4.64 trillion won against KB's 4.41 trillion won.

By categories, the interest income of KB Financial Group in the January-March period advanced 5.1 percent year-on-year to 2.78 trillion won, while that of Shinhan Financial Group increased 2 percent year-on-year to 2.54 trillion won.

KB Financial Group saw its commission income surging 21.7 percent to 918.4 billion won in the first quarter.

The combined balance of commission income and other non-interest income turned black for Shinhan Financial Group, with the amount increasing 17 percent year-on-year to 1.32 trillion won.

Of the flagship affiliates of the two banking groups, KB Kookmin Bank posted a quarterly net income of 931.5 billion won, which was down 4.7 percent from the same period the year before.

The lender explained its net interest margin (NIM) improved by 2 basis points from the previous quarter to 1.79 percent but emergency spending for pandemic-hit borrowers offset such improvement.

Shinhan Bank reported 1.59 percent for its NIM, down 0.04 percentage points from the October-December period.

KB Financial Group assessed that the quarterly performance proves its “solid fundamentals and capability to create wealth despite sales environment challenges due to economic uncertainties.”

Shinhan Financial Group attributed the decrease in quarterly net profit to an increase in loan loss reserves, which refers to the estimated amount of accounts receivable that will not be paid by customers, in response to economic unrest.

“In that regard, the group-wide fundamentals can be said to still be strong as we managed to reap gains,” it said.

Two other major banking groups ― Hana Financial Group and Woori Financial Group ― reported net profits of 1.02 trillion won and 911.3 billion won, respectively, in the first quarter.

The quarterly earnings for Hana Financial Group jumped 22.1 percent year year-on-year, backed by a surge in non-interest income that jumped 52.9 percent year-on-year to 778.8 billion won.

The quarterly non-interest income marks the highest level in the past five years.

Hana Bank logged a net profit of 970.7 billion won in the first quarter, up 45.5 percent from a year earlier.

The net profit of Woori Financial Group in the first quarter was up 8.6 percent from a year earlier. In particular, the quarterly earnings this year were 89.9 percent higher when compared to the preceding quarter.

The interest income and non-interest income combined rose 7.6 percent year-on-year to 2.55 trillion won.

The net profit of Woori Bank amounted to 859.5 billion won.