Financial groups report record results as margins fatten

ATM machines in Seoul on Nov. 29 [NEWS1]

Financial groups achieved record profits in 2021 on improved interest margins.

Shinhan Financial Group reported 4.02 trillion won ($3.35 billion) in net profit, up 18 percent on year. Its operating profit came in at 5.95 trillion won, up 21 percent on year but slightly under the 6 trillion-won market consensus provided by the FnGuide.

The company's annual revenue was 45.73 trillion won, down 7 percent on year.

"Despite the continued spread of Covid-19, profit rose for eight years straight," said the company in a statement on Wednesday. "Asset growth centered on small and mid-sized companies, interest profit increases from rates hikes and commissions on trading helped pull up our net profit."

Woori Financial Group reported a record 2.59 trillion won in net profit last year, up 98 percent on year, in its preliminary earnings. Its operating profit was 3.7 trillion won, up 76 percent on year. Market consensus was 3.5 trillion won.

The company's annual revenue was 27.2 trillion won, down 5 percent on year.

"Based on the growth momentum created by the full privatization last year, Woori Financial Group will do its best for a new leap, like portfolio expansion," said Son Tae-seung, Woori Financial Group Chairman, in a statement.

Kakao Bank reported 204 billion won in net profit last year, up 80 percent on year, according to a preliminary report on Wednesday. The internet bank missed the 229 billion-won market consensus.

Its annual revenue was 1.06 trillion won, up 32.4 percent on year.

Kakao Bank, 27.26 percent owned by Kakao, is the largest internet bank in Korea in terms of the number of users, with 17.99 million as of late last year, up 17 percent on year.

The company earned 786 billion won in interest profit last year, up 31 percent on year. It made 93.2 billion won from platform operation, up 87 percent, and 168.6 billion won from commission fees, up 13 percent.

Kakao Bank said an increase in the number of customers in their teens and 40s helped up its mobile traffic. Of the total new users of Kakao Bank, those aged 40 and over accounted for 60 percent. Services that helped users discover forgotten-about accounts helped increase the app's usage, it said.

The bank said it will introduce new financial services in the first quarter, including mortgages as early as this month, according to Jayden Hwang, a spokesperson for Kakao Bank.

"The key to the fourth quarter growth for banks was based on the improvement in interest profit," said Kim Jae-woo, an analyst at Samsung Securities. "Banks faced pressures to continuously lower net interest margin following the Covid-19 outbreak. But rates increases starting in the second half of last year is estimated to have upped the net interest margin."

BY JIN MIN-JI [jin.minji@joongang.co.kr]