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Big 4 financial groups post record net profit of $7.2B in first half

Published: 27 Jul. 2025, 13:27 Updated: 27 Jul. 2025, 16:33

A passerby walks past ATMs in Seoul on April 16. [YONHAP]

The combined net profit of Korea’s four major financial holding companies surpassed 10 trillion won ($7.2 billion) in the first half of the year for the first time ever.

According to financial industry data released earlier this week, KB, Shinhan, Hana and Woori financial groups recorded a total net profit of 10.33 trillion won in the January–June period — up 10.5 percent from 9.35 trillion won a year earlier. The figure exceeded market expectations of 9.94 trillion won and marked the highest half-year result on record.

Despite falling market interest rates, the groups reported stronger earnings due in part to the absence of losses from equity-linked securities tied to Hong Kong’s H index, which had hit financial earnings last year. Growth in noninterest income, including fee-based earnings, also contributed. The groups earned a combined 7.21 trillion won in noninterest income in the first half, up 6.5 percent on year.

"A recent surge in the local stock market boosted brokerage commissions and foreign exchange gains improved thanks to reduced volatility in exchange rates," noted a banking insider.

Interest income — a core revenue stream — also held steady. The groups earned 21.09 trillion won in net interest income in the first half, a 1.5 percent increase from 20.77 trillion won a year earlier. Although the net interest margin declined due to the Bank of Korea’s rate cuts, overall loan volume continued to grow.

By group, KB Financial Group ranked first with a net profit of 3.44 trillion won, up 23.8 percent, or 661.3 billion won, from the same period last year. It was followed by Shinhan Financial Group with 3.04 trillion won, Hana Financial Group with 2.3 trillion won and Woori Financial Group with 1.55 trillion won. KB, Shinhan and Hana each posted their highest half-year earnings ever, while Woori saw a decline.

A customer uses an ATM in Seoul on Nov. 25, 2024. [YONHAP]

Woori Financial's profit dropped 11.6 percent from 1.76 trillion won last year, which the group attributed to one-off costs such as early retirement payouts and increased investment in digital and future growth initiatives.

Despite the record profits, the mood in the financial sector remains cautious.

President Lee Jae Myung on Thursday urged financial firms to shift focus from “easy money through mortgage loans” to increasing investment. The industry now faces mounting pressure to pursue financial inclusivity and expand investments amid criticism of so-called interest profiteering. The new administration’s debt relief program for low-income borrowers and small businesses, which is being actively pursued, requires contributions totaling 400 billion won from the financial sector.

The financial groups also unveiled shareholder return and corporate social responsibility plans alongside their earnings reports. KB Financial on Thursday announced a cash dividend of 920 won per share and plans to repurchase and retire 850 billion won in stock. Its total shareholder return for the year will reach approximately 3.01 trillion won. Shinhan and Hana each plan to buy back and retire shares worth 800 billion won and 200 billion won, respectively, starting in the second half. Woori Financial set its second-quarter dividend at 200 won per share.

Shares of financial firms climbed on the news. Shinhan Financial Group closed 2.74 percent higher at 71,200 won on Friday. KB Financial Group rose 1.37 percent, while Hana Financial Group gained 1.65 percent.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY YEOM JI-HYEON [[email protected]]