[Editorial] Five Major Financial Groups Post 19.6 Trillion Won in Net Profits... Must Also Prepare for the Future

ATMs of major banks in downtown Seoul. Yonhap News Agency

The five major financial groups - KB, Shinhan, Hana, Woori and NH Nonghyup - posted combined net profits of 19.6297 trillion won in the first three quarters of 2026. That was an 8.6% increase from the same period in 2025 and the highest figure on record. The five groups have continued to set new annual profit records.

Some criticize banks' interest-focused revenue structure as "easy money," but banks are the lifeblood of the economy, and their ability to generate profits while strengthening their soundness and liquidity also benefits the economy as a whole. Banks need the capacity to absorb losses so they can provide funds to households and businesses when financial markets are shaken.

Banks have used their net profits to increase shareholder returns and employee performance bonuses. The boards of the four major financial groups have already decided to pay dividends and make additional share buybacks. Employee bonuses are also likely to increase in early 2027. However, banks should not focus solely on shareholder returns and bonuses; they must also secure sufficient resources to respond to crises and invest in the future.

First, investment in financial security is essential. A series of recent hacking and data-leak incidents at financial companies, including banks, has exposed weaknesses in security management. Banks should do more than increase their budgets: they must also inspect externally connected systems and outsourced service providers. It is the responsibility of management to verify that the personnel and systems they invest in can actually prevent attacks.

Banks must also prepare for the risk of defaults in vulnerable sectors. The burden on borrowers from rising interest rates affects banks' soundness with a time lag. Banks should closely monitor the repayment capacity of small and medium-sized businesses and self-employed people. They need a selective approach: provide funding to businesses facing temporary liquidity shortages after assessing their chances of recovery, while resolving structural insolvencies in a timely manner.

Workplace innovation using artificial intelligence (AI) should also go hand in hand with customer protection. Banks should upgrade the detection of suspicious transactions and credit assessment while putting safeguards in place to protect personal information and control errors in decision-making. The performance of financial groups cannot be judged solely by the size of their immediate net profits. Their strong results will mean more when they use increased earnings to strengthen financial soundness and security and build new sources of revenue.

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