First-Half Net Income at Financial Holding Companies Hits KRW 17.6 Trillion, a "Record High"... Banks' Profit Declines

Earnings improve in financial investment, insurance and specialized credit finance; decline at banks
Consolidated assets also hit a record 4,391 trillion won

Financial holding companies posted net income of more than 17 trillion won in the first half of this year, the highest half-year figure on record. Although earnings in the banking sector declined, results improved in financial investment, insurance, and specialized credit finance companies.

According to the Financial Supervisory Service's preliminary report, "Financial Holding Companies' Operating Results for the First Half of 2026," released on October 8, the 10 financial holding companies—KB Financial Group, Shinhan Financial Group, Hana Financial Group, Woori Financial Group, NH Financial Group, iM Financial Group, BNK Financial Group, JB Financial Group, Korea Investment Holdings, and Meritz Financial Group—recorded combined net income of 17.6 trillion won on a consolidated basis as of the end of June this year. This was an increase of 2.2 trillion won, or 13.7%, from 15.4 trillion won in the same period last year, and the highest half-year result on record.

By sector, banks accounted for the largest share of net income on an individual basis at 47.1%, but this was down 11.9 percentage points from 59.0% in the same period last year. Financial investment accounted for 24.9%, up 8.3 percentage points over the same period. Insurance accounted for 12.3%, down 1.0 percentage point, while specialized credit finance companies and other businesses accounted for 9.0%, up 1.4 percentage points.

By sector, subsidiaries and other entities recorded net income on an individual basis of 9.6 trillion won for banks, 5.1 trillion won for financial investment, 2.5 trillion won for insurance, and 1.8 trillion won for specialized credit finance companies and other businesses.

In terms of changes in earnings on an individual basis, banks saw a decline of 800 billion won, or 7.9%, from the same period last year. By contrast, financial investment rose by 2.1 trillion won, or 72.8%; insurance by 200 billion won, or 6.5%; and specialized credit finance companies and other businesses by 500 billion won, or 36.8%.

The financial holding companies' total consolidated assets stood at 4,391 trillion won as of the end of June, up 323.6 trillion won, or 8.0%, from the end of last year.

As of the end of June, the capital adequacy indicators of bank holding companies were broadly unchanged or slightly higher than at the end of last year.

The total capital ratio stood at 15.75%, unchanged from the end of last year. The Tier 1 capital ratio rose by 0.10 percentage points to 14.91%, while the Common Equity Tier 1 ratio increased by 0.21 percentage points to 13.36%.

The financial holding companies' non-performing loan ratio, an asset quality indicator, rose by 0.08 percentage points from the end of last year to 1.03%. Their loan loss reserve coverage ratio, which indicates their capacity to absorb losses, fell by 10.3 percentage points to 96.5%.

The debt ratio, based on separate financial statements, rose by 0.9 percentage points from the end of last year to 33.1%, while the double leverage ratio increased by 2.6 percentage points to 117.3%.

An FSS official said, "Financial holding companies continued to grow steadily in the first half, with an increase in total assets and expanded net income." The official added, "However, as the non-performing loan ratio rose and the share of sectors with high market sensitivity, such as financial investment, expanded, the need to manage the soundness of subsidiaries and strengthen consumer protection and internal controls has also grown."

The official added, "We will encourage financial holding companies to strengthen soundness management, including by building up their loss-absorbing capacity, in preparation for worsening domestic and external economic conditions, such as a global trend toward interest rate hikes and prolonged geopolitical risks. We also plan to step up monitoring of unsound business practices and encourage financial holding companies to fulfill their social responsibilities, including by supporting financially vulnerable groups and expanding productive and inclusive finance."

This content was produced with the assistance of AI translation services.