South Korea’s 10 financial holding groups’ combined net profit increased 31 percent last year, data showed Monday, but the upward trend is unlikely to continue next year.
According to the watchdog Financial Supervisory Service, the combined net profit of Shinhan, KB, NH Nonghyup, Hana, Woori, BNK, DGB, JB, Korea Investment and Meritz came to 15.2 trillion won ($12.3 billion) in 2019. The figure was up nearly 3.6 trillion won or 31 percent on-year.
The corresponding figure for 2018 stood at 11.6 trillion won, when there were nine financial holding groups here, barring Woori.
The FSS cited stable growth in the holding groups’ major business areas -- including banking, financial investment and insurance -- as factors behind last year’s robust figure. However, their overall performance could worsen on the back of risks stemming from the novel coronavirus and its impact on the real economy and the financial market, it added.
Of the groups’ business divisions, the banking units saw the biggest increase in net profit on-year. Banks’ net profit increased by 29.4 percent or 2.6 trillion won in the cited period, and accounted for 64.3 percent of total net profit.
Financial investment, which includes brokerages, saw net profit increase 22.6 percent or 567.6 billion won on-year. It accounted for 17.2 percent of total net profit.
Net profit from insurance jumped 96.2 percent or 492.3 billion won, as Shinhan Financial Group acquisition ING Life -- later rebranded as Orange Life -- started generating profit.
As of the end of 2019, the combined assets of the 10 holding groups stood at 2,628.6 trillion won, representing an increase of 27.1 percent on-year. Banks accounted for 75.4 percent of the total assets.
Altogether, the holding groups saw the number of their brick-and-mortar branches and stores increase by 19.7 percent on-year due to Woori Financial Group’s transition into a holding company in January 2019. Local financial institutions here have actually reduced the number of their brick-and-mortar stores in recent years, as they have expanded online and mobile transactions.
Their employee numbers increased 27.2 percent in the same period.
By Jung Min-kyung (email@example.com