Five Major Financial Groups Post 19.6 Trillion Won in Cumulative Net Income Through Q3, "Record High"

Interest and non-interest income both increased
KB Financial retained the top spot with 5.8 trillion won
Shinhan and NH NongHyup Financial exceeded last year's full-year net income

The five major financial groups - KB, Shinhan, Hana, Woori and NH NongHyup - posted net income of nearly 20 trillion won through the third quarter of this year. Their cumulative net income for the first three quarters was the highest on record.

Although rising market interest rates increased funding costs, interest income grew as loan assets expanded, particularly corporate loans. Fee income also rose at nonbank affiliates, including securities and asset management companies.

According to the financial sector on October 29, the five groups' combined net income for the first three quarters of this year totaled 19.6297 trillion won. This was up about 8.6% from 18.0723 trillion won in the same period last year.

KB Financial Group retained the top spot among the groups, posting net income of 5.7921 trillion won, up 13.1% from a year earlier.

Shinhan Financial Group posted 5.0274 trillion won, up 12.7% year over year; Hana Financial Group recorded 3.6243 trillion won, up 5.6%; and NH NongHyup Financial Group reported 2.5278 trillion won, up 11.9%.

Woori Financial Group posted 2.6581 trillion won, down 4.9% from a year earlier. However, excluding one-off gains such as bargain purchase gains from its acquisitions of Dongyang Life Insurance and ABL Life Insurance last year, Woori Financial Group's net income rose 18.7%.

Shinhan Financial Group and NH NongHyup Financial Group each surpassed their full-year net income from last year. Their full-year net income last year was 4.9716 trillion won and 2.5112 trillion won, respectively.

On a standalone quarterly basis, the five groups' net income in the third quarter of this year totaled 6.5114 trillion won, up 6.4% from 6.1171 trillion won in the third quarter of last year. KB Financial Group led with 1.9075 trillion won, followed by Shinhan Financial Group with 1.5846 trillion won, Hana Financial Group with 1.2214 trillion won, Woori Financial Group with 1.0492 trillion won, and NH NongHyup Financial Group with 748.7 billion won.

Through the third quarter of this year, solid interest income at the banks and higher fee income at nonbank affiliates both contributed to strong results. The five groups' net interest income reached 40.5034 trillion won, up 6.4% from 38.0697 trillion won in the first three quarters of last year, as bank loan assets expanded, particularly through corporate lending.

Combined net income at the banks under the five financial groups also rose 7.3%, from 13.7268 trillion won to 14.7286 trillion won. Shinhan Bank posted the highest net income, at 3.6837 trillion won, followed by KB Kookmin Bank with 3.5763 trillion won, Hana Bank with 3.3157 trillion won, Woori Bank with 2.4006 trillion won, and NH NongHyup Bank with 1.7523 trillion won.

Non-interest income also increased 19.1% year over year, from 12.254 trillion won to 14.5951 trillion won. The increase was driven by a rise in stock trading amid a strong stock market in the first half of the year, as well as significant growth in fee income from financial investment product sales and asset management.

However, net interest margins (NIMs) and non-interest income, both of which had grown through the second quarter, declined quarter over quarter in the third quarter. This is expected to pose a greater challenge for the financial groups in the fourth quarter.

The NIMs of the four financial groups that released quarterly data fell by 0.02 to 0.07 percentage points from the previous quarter. Funding costs rose as low-cost deposits declined amid rising market interest rates and funds shifted notably into higher-interest term deposits.

As stock market volatility increased and stock trading value fell in the third quarter, securities brokerage fees and gains related to securities also declined. As a result, the five groups' non-interest income in the third quarter, at 3.6915 trillion won, fell 39.9% from 6.1429 trillion won in the previous quarter.

The financial groups nevertheless plan to continue expanding shareholder returns. KB Financial Group announced a quarterly cash dividend of 1,167 won per share, up 237 won from a year earlier, for a total of 404.9 billion won.

Shinhan Financial Group announced a cash dividend of 740 won per share and a share buyback worth 450 billion won. Hana Financial Group announced a cash dividend of 1,165 won per share and a share buyback and cancellation worth 250 billion won.

Woori Financial Group announced a tax-exempt cash dividend of 220 won per share for the third quarter and plans to buy back and cancel shares worth a total of 350 billion won this year.

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