The net profit of the four major financial holding companies—KB Financial Group, Shinhan Financial Group, Hana Financial Group, and Woori Financial Group—is expected to exceed 5.6 trillion won in the third quarter of this year, continuing its growth trend compared to the same period last year. Compared with the second quarter, which posted exceptional results, net profit is projected to decline by approximately 6% due to factors such as reduced earnings from securities subsidiaries. However, despite constraints on business expansion caused by household loan regulations, asset growth centered on corporate loans, rising interest rates, and a decline in the won-dollar exchange rate are supporting performance, suggesting that the groups will again post record annual net profit for the year.
According to financial industry sources on the 6th, Hana Financial Group and Woori Financial Group will begin announcing their third-quarter results on the 23rd, followed by Shinhan Financial Group on the 27th and KB Financial Group on the 29th. Based on data compiled by financial information provider FnGuide as of the 5th, the consensus estimate (average of securities firms’ forecasts) for net profit attributable to owners of the parent for the four major financial holding companies in Q3 this year totals 5.6485 trillion won. This represents an increase of approximately 3% compared to the same period last year.
However, compared with the 6.097 trillion won net profit recorded by the four major financial holding companies in the previous quarter, a decrease of 361.2 billion won (6.0%) is projected. In the second quarter, securities subsidiaries significantly boosted performance thanks to a stock market boom and increased trading volume, but this effect has somewhat weakened in the third quarter. Although the profit scale will shrink compared to the previous quarter, the growth trend relative to the same period last year will continue.
By holding company, KB Financial Group is projected to record net profit of 1.8322 trillion won in Q3. This represents an 8.7% increase from the same period last year but an 8.0% decrease compared to the previous quarter (1.9922 trillion won). Shinhan Financial Group is expected to post 1.6038 trillion won, a 12.7% increase from the same period last year, while being projected to decline by 11.9% compared to the previous quarter (1.8201 trillion won).
Hana Financial Group is forecast to report 1.2275 trillion won in Q3, an 8.4% increase from the same period last year and a 2.9% increase from the previous quarter (1.1928 trillion won). Woori Financial Group is estimated at 985 billion won, a 2.0% decrease from the previous quarter (1.0046 trillion won). This represents a 20.8% decline year-on-year, influenced by the base effect of one-time gains such as bargain purchase gains arising from the acquisitions of Dongyang Life Insurance and ABL Life Insurance in Q3 last year.
In particular, KB Financial Group and Shinhan Financial Group, which show relatively large declines compared to the previous quarter, are expected to reflect the impact of slowing performance at their securities subsidiaries. In the second quarter, driven by a vibrant stock market, securities subsidiaries such as KB Securities and Shinhan Investment Corp led an increase in non-interest income for their groups, but net profit is projected to decline from the previous quarter in Q3.
Stable interest income from the banking sector is expected to support performance. Despite strengthened household loan management by financial regulators, the financial holding companies continued asset growth centered on corporate loans. Rising market rates that pushed up lending rates also helped defend interest income. However, as funding costs for time deposits and bank bonds have also risen in tandem, it is widely projected that the net interest margin (NIM) of major banks will decline slightly from the previous quarter.
The decline in the won-dollar exchange rate has also acted as a positive factor. The appreciation of the won has improved foreign currency translation gains and losses, and the reduction in risk-weighted assets (RWA) denominated in the won is expected to positively impact capital ratio management, including the Common Equity Tier 1 (CET1) ratio.
Even if quarterly performance slows slightly compared to the previous quarter, there is a high probability that the four major financial holding companies will achieve record-level net profit on an annual basis. The consensus estimate for KB Financial Group’s annual net profit this year is 6.6427 trillion won, marking its first-ever entry into the “6 trillion club.” Shinhan Financial Group is also expected to approach 6 trillion won with a forecast of 5.8849 trillion won. Overall, the four major financial holding companies are projected to maintain solid profit growth and set a new record for annual net profit, following last year’s achievement.
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