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Shinhan Financial Group headquarters in Seoul (Yonhap) |
After a fruitful 2019, some of South Korea’s major banking groups have posted mixed performances for the January-March period as of Friday, with the balance sheets yet to reflect the full impact of the coronavirus.
Shinhan Financial Group said Friday that its net profit for the first quarter increased 1.5 percent on-year to 932.4 billion won ($754.9 million), buoyed by its move to acquire the remaining stake in Orange Life and taking complete ownership of the insurer in January.
Shinhan first acquired Orange Life -- formerly ING Life Insurance Korea -- in September 2018 for 2.3 trillion won. The holding group plans to integrate it with its other insurer Shinhan Life Insurance by July 2021 to bolster its insurance business.
Of its units, key businesses including its flagship bank and credit card firm contributed the most to its robust performance. Shinhan Bank’s first-quarter net profit inched up 1.4 percent on-year to 626.5 billion won, while Shinhan Card’s net profit gained 3.6 percent to 126.5 billion won in the same period. While the group’s nonbanking businesses struggled to see gains in their net profits -- with a decline in face-to-face interactions with clients and a contraction in the local wealth management market -- its banking and credit card units were bolstered by its strong loan programs and online transactions, respectively, Shinhan said.
In the same quarter, Hana Financial Group saw a 20.3 percent gain in its net profit on-year, coming to 657 billion won, the banking group said Friday. Its banking unit KEB Hana Bank’s net profit increased 15.6 percent to 554.6 billion won in the cited period. The bank’s profits from interest and commissions - the traditional sources of income -- declined by a combined 0.5 percent on-year to around 1.5 trillion won.
All of its nonbanking businesses posted net profits, but its brokerage unit Hana Financial Investment saw its net profit decline by 25.2 percent on-year to 46.7 billion won in the quarter.
Meanwhile, KB Financial Group’s first-quarter net profit slipped 13.7 percent on-year to 729.5 billion won, a contrast to its rivals’ gains. It was dragged down by the sluggish performance of the brokerage sector, according to the group.
KB Securities posted a net loss of 21.4 billion won in the first quarter, as it dealt with market volatilities and blows from derivatives and foreign bonds.
Its flagship banking unit KB Kookmin Bank posted a net profit of 586.3 billion won in the cited period, up 2.4 percent on-year.
Woori and NH Nonghyup are slated to announce their earnings soon.
Despite mixed performances, the banking groups included grim outlooks for their second-quarter performances in their regulatory filings and announcements, citing the economic downturn from the global COVID-19 pandemic.
“Due to the continued downturn into economic recession, it is projected to be difficult for our flagship banking unit to grow and make a profit from commission,” Shinhan Bank said in a statement.
By Jung Min-kyung (
mkjung@heraldcorp.com)
