Major banking groups here have been posting record earnings for the first half of the year amid ongoing COVID-19 woes, buoyed by lucrative earnings from their brokerages, insurers and card issuers, data released as of Monday showed.
So far, four out of five major banking groups here – KB, Woori, Hana and NH – have announced robust net profits for the first six months of the year, eclipsing their stellar performances shown in the same period last year.
KB’s net profit for the cited period gained 44.6 percent on-year to 2.4 trillion won ($2.1 billion), marking a record net profit for the January-June period.
The banking group ranked No.1 in terms of size of net profit among the big five as of Monday.
While its flagship banking unit KB Kookmin Bank made a stable contribution, its insurer Prudential Life Insurance Company of Korea was a key player this time. The insurer’s net profit for the first half of the year jumped 219.1 percent on-year to 192.4 billion won. Its latest performance accounted for 7.7 percent of KB’s entire net profit this time, compared with 1.6 percent in the same period last year.
KB acquired the insurer from global insurance giant Prudential for some 2.3 trillion won last year.
Another star player was its brokerage unit KB Securities, which its net profit for the cited period jumped 175.7 percent to 377.2 billion won.
KB’s industry rival Hana’s net profit increased some 30 percent to 1.7 trillion won in the cited period, bolstered by earnings surprise for its second-quarter performance. Its second-quarter net profit of 917.5 billion won surpassed average market expectations of 850.9 billion won.
Hana’s performance was bolstered by its brokerage unit Hana Financial Investment, which its net profit jumped 60 percent to 276 billion won in the cited period. Its card issuer Hana Card’s net profit jumped 117.8 percent to 142.2 billion won as well.
Woori, which has been behind its four other rivals throughout last year, fought its way up this time. It posted a net profit of 1.4 trillion won for the January-June period, eclipsing its annual net profit for 2020, which stood at 1.3 trillion won.
It raked in money through the traditional way, through its flagship banking unit Woori Bank, which net profit gained 88.1 percent to 1.2 trillion won in the same period. It cited a gain in the bank’s net interest margin, which is the difference between interest paid and interest received.
NH’s net profit for the first half of the year increased 40.8 percent to 1.2 trillion won, buoyed by its brokerage unit NH Investment & Securities. The brokerage’s net profit doubled to 527.9 billion won on-year from 261.7 billion won in the same period last year.
While Shinhan has yet to announce its net profit for the cited period, market watchers project it to post around 2.3 trillion won.
Due to the robust net profits, KB, Woori and Hana have decided to carry out rare interim dividends for its shareholders. Onlookers say that Shinhan is likely to mirror the move as well.
Brokerages here have been posting record gains since last year, as the ultra-low interest rate have been pushing investors towards heavy borrowing. The borrowed money has been funneled into both the local and overseas stock market and the nation’s heated housing market.
By Jung Min-kyung (firstname.lastname@example.org