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KB·Shinhan side by side 1 group Four major financial holdings

[이코노믹리뷰=금교영 기자] The four major domestic financial holdings continued their performance in the third quarter. KB Financial Group (105560) and Shinhan Financial Group (055550) took the leading position of KB Financial Group, with quarterly net profits exceeding KRW 1 trillion, and Hana Financial Group (086790) and Woori Financial Group (316140) also recorded performance exceeding market forecasts. .

According to the industry on the 27th, the net income of the four major financial holding companies, including KB, Shinhan, Hana, and Woori, in the third quarter of this year was 3,551.2 billion won, an increase of 9.4% (306.6 billion won) from last year’s 3.244.6 billion won. Even in the aftermath of Corona 19, there was a lot of demand for loans for real estate and stock investment, and it is interpreted as the influence of the increase in commission income of affiliated securities companies due to the increase in stock investment.

‘KB’ securing its leading financial position,’Shinhan’ joins the ranks of 1 trillion quarterly

KB Financial Group recorded a net income of 1.16 trillion won in the third quarter. This is an increase of 24.1% year-on-year and 18.8% (184.8 billion won) over the previous quarter. This quarter’s strong performance was mainly due to the base effect of pre-tax transfer of approximately 149 billion won in additional bad debt provisions after tax and the gains from bargain purchases related to the acquisition of Prudential Life of 145 billion won.

However, excluding one-off factors, ordinary net profit also maintained its profit strength at the level of the high end of 900 billion won. This is due to the strong increase in core profits such as interest income and commission income. KB Financial Group’s cumulative net interest income for the third quarter was 7,143.4 billion won, and the cumulative net commission income was 2.17 trillion won, up 4.0% (274.8 billion won) and 26.4% (454 billion won) compared to the same period last year, respectively.

The increase in net interest income led to the growth of banks and credit cards despite a decline in the net interest margin (NIM) caused by a decline in interest rates. The commission income is due to the increase in the earnings of non-bank affiliates, such as the increase in KB Securities’ customer trust, improvement in IB performance, and increase in card merchant fees.

In fact, KB Securities’ commissions for the brokerage industry have increased sharply, with commission fees increased by 244 billion won due to efforts to increase customer trust, and IB commissions increased by approximately 29 billion won due to the expansion and support of the IB business. As a result, the cumulative net income recorded 338.5 billion won, an increase of 50.6% (1138 billion won) from 2247 billion won in the same period of the previous year.

Shinhan Financial Group also joined the ranks of 1 trillion in quarterly net income, making quarterly net profits of 1.147.7 billion won. It was an increase of 31.1% compared to 873 billion won in the previous quarter, and the performance exceeded the expected market forecast at the end of 800 billion won.

Shinhan Financial gave KB Financial a leading financial position with a difference of 21.9 billion won in quarterly net income, but the cumulative net profit in the third quarter was 2,9502 billion won, the highest performance ever in the financial sector, surpassing KB Finance (2,8779 billion won) by 72.3 billion won. .

Shinhan Financial Group cited the expansion of the non-bank portfolio profit base as the main reason for its good performance. In fact, the non-banking sector accounted for 41% of Shinhan Financial’s total net income, up 7 percentage points from 34% at the end of last year.

Shinhan Card’s third-quarter net profit was 166.7 billion won, an increase of 19.9% ​​year-on-year, making the highest profit. Shinhan Investment Corp and Shinhan Life Insurance’s net profit increased by 115.0% and 150.6% to KRW 127.5 billion and KRW 70.7 billion, respectively, and Orange Life also increased by 99.2% to KRW 77.8 billion.

Capital markets (GIB, GMS) and global performance also contributed. The cumulative operating profit of the GIB division in the third quarter was 649.4 billion won, an increase of 24% (127.3 billion won) from the same period of the previous year, and the GMS division’s operating profit surged 128% (264.9 billion won) to 4725 billion won during the same period. The global division’s operating profit increased by 7% (534 billion won) to 7916 billion won.

Net income of the 4 major financial holdings in the third quarter. Data = each company

Hana·Our’earning surprise’… Impact of non-banking and provisions

Hana Finance and Woori Finance also posted net profits that exceeded the consensus.

Hana Financial Group’s third-quarter net profit was 76.1 billion won, up 10.3% from the previous quarter. The main drivers of the earnings growth were the advancement of the non-banking division and the expansion of the business base of non-face-to-face channels.

In fact, the cumulative net income of non-banking affiliates rose at the same time, and the contribution of the non-banking portion to the group’s overall profit was 31.3%, up 7.3 percentage points from the end of last year (24.0%). Hana Financial Investors recorded a net profit of 288 billion won, an increase of 36.2% year-on-year due to the increase in commission income, and Hana Card’s net profit surged 129.6% (66.4 billion won) from 49.8 billion won to 1144 billion won due to the increase in credit card fees.

The increase in commission income at these subsidiaries also helped increase core profits within the group. The cumulative commission income for the third quarter was 1.6884 trillion won, up 6.1% from 1.591.3 billion won in the same period last year. Compared to the previous quarter, it increased 9.6% to KRW 67.5 billion.

Hana Capital achieved a net income of 127.1 billion won, an increase of 65.2% (50.1 billion won), thanks to the growth of interest income following the increase in interest rate assets. Hana Life and Hana Asset Trust also increased 49.1% and 37.0% to 25.7 billion won and 65.7 billion won, respectively. Net profit. It is evaluated that the efforts of affiliates to enhance competitiveness and create synergy contributed to the group’s solid growth.

Woori Financial Group posted a net income of 479 billion won in the third quarter. It was the highest profit growth rate among the four major financial holdings, up 236.9% from 142.4 billion won in the previous quarter. Unlike corona 19 and a large-scale provision for the suspension of private equity repurchases in the second quarter of last year, it is analyzed that the amount of provisions accumulated in the third quarter decreased to less than half, which affected the increase in net profit.

Net operating income consisting of interest income and non-interest income reached KRW 1.71 trillion, up 5.0% from the previous quarter (KRW 1.63 trillion). Interest income increased 0.6% QoQ to KRW 1.48874 billion despite concerns about lower profitability due to the two cuts in the base rate in the first half of the year. This is the result of improving the profit structure achieved through continued growth of loans centered on SMEs and increased core low-cost deposits. Non-interest income increased by 47.0% to 226.7 billion won due to the increase in foreign exchange and derivative-related profits.

Woori Financial Group, which was launched last year, accounted for 90% of bank profits, significantly lowering the proportion of non-banking companies compared to other financial holdings. However, the decision to take over the management rights of Aju Capital on the 23rd is expected to help strengthen non-banking in the future. Upon acquisition of Aju Capital, Aju Savings Bank, a wholly-owned subsidiary of Aju Capital, will be incorporated as a subsidiary, and Woori Finance is expected to increase its contribution to non-banking profits through synergy between subsidiaries within the group.

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