2014 is looking a lot more profitable for Korea banking groups
KB Financial Group said yesterday it earned 765.2 billion won ($744 million) in net profit in the first six months of the year, up an impressive 33.1 percent from a year earlier.
The group’s profit grew thanks to a recovery in the value of securities that were worth around 121 billion won in the Jan. to June period last year, the group said.
It was an uncommon bit of good news for a group that was vilified by the public for poorly managing customers’ personal information and exposing them to the nation’s worst data leak, along with several ethical scams committed by the group’s employees.
KB also suffered highly embarrassing strife between its Chairman Lim Young-rok and bank CEO Lee Kun-ho in May over a minor internal issue. The group is currently under investigation by the Financial Supervisory Service.
The group’s total assets stood at 393.2 trillion won in the first half, growing 3.5 percent on-year. Kookmin Bank’s total assets increased 4.8 trillion won to 292.6 trillion won. Kookmin Card’s declined 0.6 trillion won to 15.2 trillion won.
In the second quarter, KB recorded a 4.2 percent increase in its profit from interest, 1.6 trillion won, contributing to the growth in the overall net profit.
Commission fees profit also grew 12.3 percent to 352.1 billion won in the April-June period.
The flagship bank’s net interest margin recorded 1.82 percent in the second quarter, improving 0.04 percentage point from the previous quarter, the group said.
“Going back to basics, the group will try to improve productivity and efficiency and regain public trust,” the group said in a statement.
Shinhan Financial Group, the nation’s largest financial giant, said on Thursday it posted almost 1.14 trillion won in net profit on a consolidated basis for the first half of the year, up 9.6 percent from a year earlier.
The group achieved over 1 trillion won in net profit for five consecutive years since 2010, cementing its position as the No.1 financial group in the country.
Woori Financial Group, slated for an earnings announcement next month, is also expected to join the 1 trillion won club.
According to the industry, it is estimated the group’s second-quarter net profit would reach 830 billion won, and combined with the first-quarter net profit, the total would surpass 1 trillion won.
The significant improvement in the net profit was due to the 604.3 billion won sale of Kyongnam and Kwangju Bank.
Hana Financial Group also said its net profit grew 17.6 percent to 610.1 billion won in the first half, owing to a 116 percent surge in second-quarter net profit.
“Banks showed better performances in the second quarter, leading the overall growth in the first half,” said an industry insider. “But their earnings may dwindle in the next six months if the Bank of Korea will make a cut in the benchmark interest rate.”
BY SONG SU-HYUN [firstname.lastname@example.org]