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KB clinches title as leading bank in Q1 with record earnings

Buoyed by robust nonbanking businesses, banking groups lodge record-high quarterly net profits

(Photos provided by respective firms)
(Photos provided by respective firms)
South Korea’s KB Financial Group outperformed the three other major banking groups here in terms of first-quarter net profit, buoyed by its strong brokerage and other nonbanking businesses, data released Friday showed.
KB’s net profit in the first three months gained 74.1 percent on-year to 1.2 trillion won ($1.1 billion) -- a record-high quarterly net profit since it became the holding entity of KB-branded financial and banking firms in September 2009.

The value of its total assets grew 1.7 percent to 620.9 trillion won during the three-month period.

The record-high quarterly net profit was a result of robust earnings from its nonbanking businesses such as brokerage, insurance and credit card. The combined net profit of its nonbanking businesses in the first quarter nearly quadrupled on-year from 144 billion won to 581 billion won.

Among all its units, brokerage subsidiary KB Securities stood out, raking in a whopping 221 billion won in net profit. It posted a net loss of 21 billion won in the first quarter of 2020 as people flocked to the stock market while the benchmark interest rate remained low after the outbreak of the coronavirus early last year.

Following KB, Shinhan Financial Group came second as it posted a record quarterly net profit of 1.19 trillion won, up 27.8 percent on-year. Similar to KB, the growth was driven by its nonbanking businesses, with their combined net profits amounting to a record 613.3 billion won. Shinhan said that the profits from the nonbanking businesses accounted for almost half of its entire profits.

KB and Shinhan have been long engaged in a fierce battle to top the banking sector, but the latter has recently suffered blows after it was found to be involved in selling troubled funds linked to hedge fund operator Lime Asset Management.

Shinhan’s total assets stood at 618.8 trillion won as of end-March, up 7 percent on-year.

Hana Financial Group secured the third spot, posting a first-quarter net profit of 834.4 billion won, gaining 27 percent on-year. The net profit from its nonbanking businesses accounted for nearly 40 percent of the entire pie. Net profits of its brokerage unit, Hana Financial Investment, jumped 192.9 percent to 136.8 billion won on-year, while its card issuer Hana Card gained 139.4 percent to 72.5 billion won in the same period.

Woori Financial Group came in at fourth place, also posting a record-high quarterly net profit of 671.6 billion won in the same period. The figure increased 29.6 percent on-year.

Although Woori Financial Group fell behind its peers in terms of sheer net profit, the latest announcement came as a surprise for its shareholders and industry watchers, as the firm was hit hardest by the COVID-19 pandemic last year. The latest net profit increased over 300 percent compared with the corresponding figure for the last three months of 2020.

NH Financial Group is the only company among the five major banking groups here that has yet to announce its first-quarter earnings. It is scheduled to post its earnings on April 30.