Shinhan, KB post better-than expected profitDespite tough market conditions including low interest rates, the country’s leading financial institutions said they had better than expected earnings for the third quarter.
Shinhan Financial Group and KB Financial Group saw profit rise from July to September, they announced on Thursday.
Shinhan Financial Group, a holdings company of flagship Shinhan Bank, posted 707.9 billion won ($628.2 million) in net profit, up 4.3 percent over last year.
Profits from interest rates and reduced bad debt contributed to the bank’s sound performance, the group said.
The healthy profit allowed the group to achieve an accumulated net profit of more than 2 trillion won through the second quarter, the first time in four years.
Though the banking unit of Shinhan generates the majority of the financial group’s profit, other affiliates including Shinhan Card and Shinhan Life Insurance also posted higher profits.
The banks’ improved earnings come as they strive to stay competitive amid an era of low interest rates.
The third quarter, in particular, was expected to pose challenges since the Bank of Korea cut its benchmark interest rate to a record low of 1.25 percent in June.
The low interest rate typically translates into lower profit margins since it would collect less interest from loans.
KB Financial Group also posted an earnings surprise on Thursday as its net profit rose by 36.4 percent to 564.4 billion won in the third quarter.
The figure added to the accumulated net profit of 1.6 trillion won, up 25.1 percent compared to the same month last year.
BY PARK EUN-JEE [email@example.com]