Financial firm profits pared down by increased reserves

ATM machines of Hana, KB, Shinhan and Woori installed in central Seoul [YONHAP]

Hana Financial Group posted record-high earnings in the second quarter, while increased reserve funds to brace for market uncertainties pared down gains for Shinhan Financial Group and Woori Financial Group.

Hana Financial Group logged an 11.9 percent increase in net profit at 919 billion won ($719 million), the company announced in a regulatory filing Thursday.

Although the quarterly figure fell short of a 952-billion-won estimate by market tracker FnGuide, it accounted for an on-year increase of 16.6 percent during the first six months of 2023.

The financial group’s half-yearly net profit reached an all-time high of 2.2 trillion won on the back of sound non-interest profit, which spiked 196.5 percent on year to 1.37 trillion won between January and June.

Hana Financial Group said growth in loans, foreign exchange commissions and stock trade commissions played key roles in its performance.

Hana Bank reported 868.3 billion won in net profit in the second quarter, up 22.9 percent on year, while Hana Securities swung into the red with a net loss of 48.7 billion won on increased reserves.

Shinhan Financial Group reported 1.24 trillion won in net profit in the second quarter, down 4.6 percent on year, the financial firm said the same day. The figure matched the market estimate compiled by FnGuide.

Second-quarter net profit declined from increased non-production costs and reserves that set off gains from interest profit — profits derived from interest charges — and non-interest profits, it said.

The firm also cited rising concerns over project financing in the real estate market and other weak sectors as its reason for stockpiling more reserves.

Interest profit at the financial group climbed 3.3 percent on year to 2.7 trillion won in the April-June period, and non-interest profit soared 30.8 percent on year to 1 trillion won.

Shinhan Bank’s net profit fell 8.7 percent on year to 749 billion won in the quarter, while net profit at Shinhan Securities advanced 44.8 percent to 123 billion won on increased trading volume.

The financial group’s first-half net profit mounted to 2.63 trillion won, down 2.1 percent on year.

Woori Financial Group posted 625 billion won in net profit for the quarter, down 32.3 percent on year, according to its quarterly regulatory filing. The latest profit missed FnGuide's forecast of 816.3 billion won.

Interest profit came in at 2.2 trillion won, up 3.7 percent on year, but non-interest profit fell 30.3 percent on year to 279 billion won.

Woori Bank reported 612.5 billion won in net profit, down 23.7 percent on year.

Woori Financial Group’s first-half net profit totaled 1.54 trillion won, down 12.7 percent from last year’s data as it was weighed down by reserve funds, which rose 65 percent.

BY SOHN DONG-JOO [sohn.dongjoo@joongang.co.kr]