Major Korean financial holding firms beat market consensus in first quarter

Finance

Published: 27 Apr. 2023, 18:54

Major Korean financial holding firms beat market consensus in first quarter

From left: Office of KB, Shinhan, Hana and Woori financial holding firms [KB, SHINHAN, HANA, WOORI]

Four major financial holding firms beat the market consensus in the first quarter, despite raising loan loss reserves following the banking crisis.

KB Financial Group beat the market consensus, reporting a 1.5-trillion-won ($1.12 billion) net profit in the January-March period, according to its preliminary earnings released Thursday. The figure is higher than the 1.4-trillion-won market consensus compiled by FnGuide.

KB’s net profit rose 2.5 percent on year. The company cited the recovery of non-banking sectors and the improvement of net interest margins.

“Amid the expanded uncertainties in the financial market caused by the bankruptcy of the Silicon Valley Bank and crisis at Credit Suisse, profitability improved in non-banking sectors, including securities and insurance affiliates,” KB said in a statement.

“Improvement in net interest margins from loan growth and the rise of interest rates, and the effort to raise cost efficiency all helped.”

Non-bank sectors accounted for 41 percent of the company’s net profit, up from 36.1 percent in the same period last year.

Net profit at KB Bank fell 4.70 percent to 931.52 billion won in the first quarter, while KB Securities reported 141.89 billion won in net profit, up 22.62 percent.

Raising loan loss reserves in response to increasing vulnerable debtors was the reason for the bank’s profit decline, it said.

Shinhan Financial Group also beat the market consensus, reporting a 1.39-trillion-won net profit in the first quarter. The figure, up 0.23 percent on year, was higher than the 1.3-trillion-won market consensus, according to the preliminary earnings report Thursday.

Shinhan Bank’s net profit jumped 7.9 percent on year to 931.5 billion won in the January-March period. The interest profit fell by 7.9 percent while the non-interest profit jumped from commissions, it said.

Shinhan Securities’ net profit jumped 14.3 percent in the same period to 119.4 billion won. It was helped by a rise of floor trading.

Hana Financial Group reported 1.1 trillion won in net profit, beating the 943.6-billion-won market consensus. It was up 22.14 percent on year.

Hana said its non-interest profit jumped 52.9 percent on year to 779 billion won, the highest in five years. It was helped by the profits earned from selling securities and a rise of commission profits.

Hana Bank reported 970.7 billion won in net profit in the first quarter, up 43.5 percent on year, in its preliminary earnings report.

Hana Securities reported 83.4 billion won in net profit in the same period, down 30.11 percent from the same period a year earlier.

Woori Financial Group reported 911.3 billion won in net profit in the first quarter, beating the 878-billion-won market consensus. The figure was up 8.60 percent from a year earlier, according to the preliminary earnings report Wednesday.

Non-interest profits fell due to the volatile foreign exchange rate caused by global liquidity risks, but commission profits rose from investment banking, it said.

Woori Bank reported 859.5 billion won in net profit, up 19.97 percent on year.

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