The net income of the country's four major financial holding companies for the first quarter of this year approached 5 trillion won, marking a "record-breaking performance." Despite rising interest rates, the increase in the interest margin generated over 10 trillion won in interest income.
According to the financial sector on the 27th, the total net income of the four major domestic financial holding companies, including KB, Shinhan, Hana, and Woori Financial Group, recorded 4.9289 trillion won in the first quarter. This is an increase of 707.4 billion won (16.7%) compared to 4.2215 trillion won in the first quarter of last year. It surpassed last year's third-quarter record of 4.9128 trillion won, achieving the highest quarterly income ever.
KB Financial's net income was 1.6973 trillion won, an increase of 655.3 billion won (62.9%) compared to 1.0420 trillion won in the first quarter of last year. This exceeded initial market expectations, marking the largest amount recorded for the first quarter. Shinhan Financial reported a net income of 1.4883 trillion won, which is an increase of 166.8 billion won (12.6%) compared to 1.3215 trillion won in the same period last year. Likewise, this is the highest amount recorded for the first quarter.
Hana Financial recorded a net income of 1.1277 trillion won, an increase of 93.7 billion won (9.1%) compared to 1.0340 trillion won in the same period last year. This is the largest amount recorded for the first quarter since the merger of Hana and Korea Exchange Bank in 2015. Woori Financial's net income was 615.6 billion won, a decrease of 208.4 billion won (25.3%) compared to 824.0 billion won in the first quarter of last year. The increase in one-time expenses due to early retirement costs and the launch of brokerage firms, along with increased selling and administrative expenses due to investments in digital IT, had a significant impact.
The record performance of the financial holding companies despite the increase in the base interest rate is attributed to the base effect from last year's compensation related to the Hong Kong H index ELS and solid interest income. As loan assets steadily increased, interest income showed a robust growth trend due to low-cost funding. In the first quarter of this year, the net interest margin for the four financial groups was between 1.69% and 2.01%, which is an increase compared to the fourth quarter of last year.
The interest income of the four major financial holding companies reached 10.6419 trillion won, surpassing 10 trillion won again this year. This represents an increase of 237.3 billion won (2.28%) compared to 10.4046 trillion won in the first quarter of last year. Considering that Samsung Electronics recorded an estimated operating profit of 6.6 trillion won in the first quarter of this year, the four major financial holding companies earned 1.6 times more in interest. In contrast, the non-interest income of the four major financial groups was 3.2515 trillion won, a decrease of 46.5 billion won (1.4%) compared to the same period last year.
The banks drove the performance. The net income for the four major banks saw KB Kookmin Bank's net income surge to 1.0264 trillion won, an increase of 636.9 billion won (163.5%) compared to 389.5 billion won in the first quarter of last year. Shinhan Bank's net income rose to 1.1281 trillion won, an increase of 199.5 billion won (21.5%) compared to 928.6 billion won in the same period last year. Hana Bank increased its net income to 992.9 billion won, a 17.9% rise year-on-year. Woori Bank's net income was 633.1 billion won, down 156.4 billion won (24.7%) from 789.5 billion won in the same period last year.
Forecasts suggest that this year, the net income of the four major financial holding companies will achieve a record high. Last year, they recorded a total net income of 16.4205 trillion won, setting a record. With net income approaching 5 trillion won in the first quarter, there are predictions that this year will exceed 17 trillion won.