Financial groups post record performance in Q3 amid strong interest income

Korea’s top four financial groups — KB, Shinhan, Hana and Woori — posted strong third-quarter earnings, driven by robust interest income despite declining interest rates, market watchers said Thursday.

Also contributing to their record performance were non-banking businesses, including income fees, trading and consulting services.

Many say efforts to diversify business portfolios and enhanced risk management have helped defend profitability despite the monetary easing cycle.

KB Financial said Thursday that its net income in July-September reached 1.68 trillion won, led by steady earnings from both banking and non-banking businesses.

The group’s net income in the first nine months came to 5.12 trillion won, with a return on equity (ROE) of 12.78 percent.

Net fee and commission income in the third quarter increased 3.5 percent from a year earlier.

As of end-September, KB’s Common Equity Tier 1 (CET1) ratio was 13.83 percent, reflecting strong capital management.

“A balanced profit based on a diversified non-banking portfolio helped our strong performance,” the group said.

On Tuesday, Shinhan said its net income came to 1.42 trillion won, up 9.8 percent from the previous year.

The group’s net income in the first nine months stood at over 4.46 trillion won, up 10.3 percent from a year earlier. This was driven by corporate lending, higher fee income from stock trading and investment banking and the removal of one-off costs recorded last year.

“We achieved stable performance through asset growth, fee expansion and efficient cost control,” Shinhan said.

Hana’s figure, announced the same day, came in at 1.13 trillion won, down 2.1 percent from a year earlier.

The group’s figure for the first nine months surpassed 3.43 trillion won, up 6.5 percent from the previous year.

Hana’s non-interest income rose to 2.02 trillion won, up 12.2 percent, driven by trading and derivatives gains, while fee income climbed 6.7 percent amid growth in investment banking pensions businesses.

Woori’s figure, announced Wednesday, showed a net income of 1.24 trillion won, up 37.6 percent from a year earlier. Its net income for the first nine months was 2.79 trillion won, up 5.1 percent.

Woori said its strong results were fueled by steady net operating income growth and the positive impact of an insurance subsidiary acquisition, a long-awaited addition to the group’s portfolio long criticized for lacking insurance service.

“We were able to defend profitability despite macroeconomic headwinds,” the group said. “We will continue to strengthen fee-based, capital and insurance businesses to bolster sustainable financial health of the group.”