KB, Hana report lower net profit in first quarterThe first-quarter earnings season has arrived for the finance industry, starting with KB Financial Group and Hana Financial Group yesterday.
Following a lousy 2013 marked by low interest rates and tumbling profits, the fnancial groups announced declines in net profits for the first three months of the year. The results were predictable, especially after major hacking and financial fraud incidents that affected both groups.
KB Financial Group said its Q1 net profit dipped 9.2 percent to 373.5 billion won ($358.7 million) compared to a year earlier.
Major causes of the decline were decreased profits from interest and fees on bancassurance products, the group said in its statement. Bancassurance refers to insurance policies sold at banks.
The third-largest financial group’s profits from interest dropped 6.5 percent to 107.9 billion won compared to the same quarter last year.
The group’s earnings from commission fees of bancassurance and card products plunged 14.6 percent to 313.4 billion won.
It also posted 100.7 billion won in losses in trading. The loss decreased from 198.3 billion won in the previous quarter, when the group faced temporary losses due to bond sales.
The group’s flagship KB Kookmin Bank had 258.2 billion won in net profit in the first quarter, down 12.7 percent from a year earlier. However, quarter-on-quarter, the banking unit’s net profit climbed 49.2 percent.
As of March, the group’s total assets reached 387.6 trillion won. The bank’s assets accounted for 289.8 trillion won of the total.
“The group’s foremost goal this year is to restore consumer trust by going back to the basics of increasing productivity and efficiency,” said a spokesman of the group.
Since late last year, a series of incidents involving KB Kookmin Bank and KB Kookmin Card have put a damper on the group’s public image.
Hana Financial Group said its Q1 net profit slid 33.1 percent to 192.7 billion won compared to the same quarter last year.
“The profit fall largely stemmed from 65 billion won used for the government-run People’s Happiness Fund, which extends mortgages at low rates, and 65.5 billion won for KT ENS’s court receivership,” the group said in a statement.
BY song su-hyun [email@example.com]