Financial groups unlikely to continue last year's momentum in Q1

By Jhoo Dong-chan

Korea's big four financial groups, which enjoyed record-high earnings last year, won't continue their momentum in the first quarter of this year, according to a financial researcher.

FnGuide said Wednesday that the big four financial groups ― Shinhan, KB, Woori and Hana Financial Group ― were estimated to have posted a combined 2.87 trillion won ($2.51 billion) net profit in the first quarter of this year, down 7.6 percent year-on-year from 3.11 trillion won.

Of them, Shinhan Financial Group is forecasted to reach a 905 billion won net profit in the first quarter, up 4.1 percent from a year ago.

HMC Investment Securities and KTB Investment said the group's earnings will reach 910 billion. Of the four, Shinhan is the only firm that will posts year-on-year growth in the period.

“Shinhan acquired Orange Life last year. The insurer's earnings start to be reflected in the group's net profit from the first quarter of this year,” said a Shinhan Financial Group official.

“I can't elaborate further since the group's Q1 net profit has yet to be officially announced, but Orange's earnings stood at 340 billion won last year. The insurer's entry is a huge lift to the group.”

Shinhan is also very likely to maintain the nation's leading financial group status as KB is expected to post an 828 billion won net profit, down 14.5 percent from a year ago.

Shinhan had been the nation's leading financial group in earnings for nine consecutive years until KB claimed the position in 2017. The former retake the leader position last year thanks to its solid numbers in household loan sector.

Hana Financial Group is also expected to suffer a 14.8 percent decline in earnings to 582 billion won in the first quarter.

The net profit of Woori, which turned itself into a holding company structure last year, is forecasted to fall by 31.5 billion won to mark 563 billion won.