Shinhan, Woori Rise Amid Global Crisis
By Kim Jae-won
Staff Reporter
In Chinese, "crisis" is composed of two letters, which mean "danger" and "chance," respectively. Here, one financial group has suffered after the global crisis, while other groups have risen by changing the crisis into opportunities.
KB Financial Group, which has dominated the local banking industry, yielded two thrones to its rivals ― Shinhan Financial Group and Woori Financial Group. Shinhan stole KB's crown in net profit, while Woori is now on top in terms of total assets.
KB posted a net profit of 539.8 billion won in 2009, down 71.2 percent from the previous year, the group said Wednesday.
The fall came as the group experienced a double burden of rising credit costs and falling profitability as a result of piling up reserves for loan losses.
Shinhan marked 1.3 trillion won in net profit for 2009, more than doubling KB, thanks to balanced business portfolios between banking and non-banking sectors.
It was down 35.3 percent from the previous year but had the biggest net income among local financial groups.
Woori Financial Group said that its total assets stood at 317.9 trillion won as of the end of December, down 10.5 percent from the previous quarter. However, it grabbed top place in total assets edging KB by 1.9 trillion won.
Woori also swung to profit in the fourth quarter last year. The group said that it recorded a net income of 1.03 trillion won in 2009, up 126 percent from a year ago. Revenue plunged 78.9 percent on-year to 8.26 trillion won while operating profit came to 190.5 billion won.
Net profit stood at 156.8 billion won in the October-December period, a turnaround from a loss of 664.8 billion won a year earlier. But compared with three months earlier, net income declined 67.6 percent, hit by its exposure to the ailing Kumho Asiana Group.
However, some analysts said that KB will rebound as the group got rid of risks reserving more loan-loss provisions.
"KB will get attention this year because it already reduced risks with conservative loan-loss provisions," an analyst at Daewoo Securities said.
Meanwhile, the state-run Industrial Bank of Korea overtook Hana Bank in total assets, rising to number 4. IBK's total assets reached 156.6 trillion won in December, compared to Hana's 152 trillion won.