KB outperforms Shinhan in 3Q earnings

Shinhan Financial Group Chairman Cho Yong-byoung. Korea Times file

By Lee Kyung-min

KB Financial Group reclaimed the top position among financial firms here in the third quarter in terms of earnings, buoyed by the robust performance of its non-banking businesses. Rival Shinhan Financial Group, which was the top-performer in the previous quarter, slid to second place.

KB beat Shinhan in the first half of this year, but fell about 40 billion won behind in the April-June period. However, in the third quarter, KB outperformed Shinhan both in cumulative and quarterly net income.

Shinhan's net income in the July-September period of this year was over 1.11 trillion won ($948 million), but down 2.5 percent from a year earlier. Cumulative net profit in the first nine months was over 3.55 trillion won, up 20.7 percent from a year earlier.

KB logged a net profit of 1.29 trillion won in the third quarter of this year, with its cumulative net income in the first nine months standing at 3.77 trillion.

The performance of the group's banking subsidiaries reported an over 20 percent year-on-year increase in the third quarter.

Shinhan Bank's net profit jumped to 759.3 billion won, up 21.6 percent from the same period last year. Interest income rose 10.2 percent to 6.66 trillion won, led by an asset augmentation strategy for high net-worth customers.

KB Kookmin Bank's net profit in the same period was 777.7 billion won, up 22.4 percent. The increase in interest income was led by stable profits from loans and increased trust income profits and investment banking business-related profits.

KB Financial Group Chairman Yoon Jong-kyoo Korea Times file

Net profit of their non-banking subsidiaries reported double-digit year-on-year growth in the first nine months.

KB recorded a cumulative net profit of 1.57 trillion won, up 57.8 percent from last year, whereas Shinhan's was 1.65 trillion won, up 30.5 percent from a year earlier.

Shinhan's non-banking subsidiaries reported a decrease in net profit, whereas those of KB's remained solid.

Shinhan's card and financial investment and life insurance units registered a net profit of 171.5 billion won, 154.7 billion won and 128.5 billion won, respectively.

They marked a year-on-year decrease of 13.8 percent, 71.2 percent and 27.8 percent, respectively.

KB Securities, a brokerage subsidiary of KB, reported a net profit of 168.9 billion won, up 10.1 percent from the previous quarter.

KB Insurance and KB Kookmin Card posted a respective net profit of 126.3 billion and 121.3 billion, up 70.4 percent and 9 percent, respectively.

The two financial groups are expected to report an annual profit of 4 trillion won.