Four big banks rake in Q2 profit

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Four big banks rake in Q2 profit

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Korea’s largest financial groups enjoyed robust earnings in the second quarter thanks to more interest income, improved performances of non-banking affiliates and cost cuts.

KB Financial Group stole the crown as top earner in net profit from Shinhan Financial Group.

The holdings unit that controls KB Kookmin Bank, KB Securities and other financial affiliates posted 990.1 billion won ($879 million) in net profit, a whopping 70.6 percent increase over the same period last year.

The quarterly performance, announced late Thursday, helped KB achieve the highest half-year profit in its history.

“The second quarter results far surpassed our estimate and the consensus forecast,” said Choi Chung-uk, researcher at Daishin Securities

“KB Financial Group got as much as 37 percent of its net profit from non-banking businesses as it incorporated KB Insurance as a consolidated subsidiary and upped its stake in other affiliates whose quarterly earnings were fully factored in,” the researcher noted.

Banking helped boost the group’s profits with improved asset quality and reduced credit costs, he said.

Shinhan was pushed back into second place in terms of net profit.

The group registered 892 billion won in net profit, up 30.5 percent from a year ago. Shinhan Financial Group’s quarterly performance was better than expected.

Kim Jae-woo, an analyst at Samsung Securities, cited growth in interest?related income and gains from the offloading of a stake in Visa as the major factors for the second quarter profit.

He expects that Shinhan’s efforts to streamline its organization, if done efficiently, will translate into good results in the future.

“Shinhan Financial Group has moved proactively to revamp its organization and facilitate seamless collaboration among affiliates, integrating departments and bringing back the talent that spearheaded previous mergers and acquisitions,” he said.

When considering half-year results, Shinhan remains on top of the pack with 1.9 trillion won in net profit, the highest since the holding group was established in 2001.

Hana Financial Group, a holding unit that includes KEB Hana Bank and KEB Hana Card, said on Friday that it generated 563.6 billion won in net profit, up 50.2 percent compared to the same period last year.

Woori Bank, the fourth largest commercial bank, announced a net profit of 460.8 billion won on Thursday, soaring 50.1 percent year on year.

Shares in all four of the largest financial units hit new 52-week highs on Friday.


BY PARK EUN-JEE [park.eunjee@joongang.co.kr]

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