Korean financial groups celebrate best Q3 on unprecedented rate increases

South Korea¡¯s major lenders Shinhan Financial Group, Hana Finanacial Group, and Woori Financial Group reported their best third quarter thanks to thriving banking business from fast rises in interest rates and escalating risk aversion sentiment.

Shinhan Financial Group in its regulatory filing on Tuesday that its net profit in the third quarter amounted to 1.59 trillion won ($1.11 billion), a quarterly record after gaining 20.8 percent from a quarter ago and 42.9 percent from a year earlier. The figure also beat the market consensus of 1.52 trillion won compiled by Seoul-based financial data tracker FnGuide.

Its cumulative net profit for the first nine months reached 4.31 trillion won, up 21.2 percent up from the same period last year.

Rising net interest margin from benchmark rate hikes by the central bank and sale of real estate assets due to digital transition bolstered income.

The net interest margin of the financial holding firm grew to 2.00 percent, adding 0.02 percentage point from the previous quarter.

Its mainstay Shinhan Bank reported a net profit of 909.4 billion won in the third quarter, up 19.8 percent from a year ago. Shinhan Securities¡¯ net profit expanded 754.4 percent on year to 381.3 billion won, mainly backed by the sale of its headquarters.

Shinhan Card saw its net profit increase 2.0 percent to 175 billion won, and insurance unit Shinhan Life decrease 0.8 percent to 92 billion won.

Shinhan Financial Group earlier decided on dividend payouts of 400 won per share and a stock repurchase worth 150 billion won to raise shareholder value.

Hana Financial Group also reported stellar earnings for the quarter ended September. Hana Financial Group in its regulatory filing on the same day said its net profit reached 1.14 trillion won, up 33.98 percent from three months ago and 20.56 percent against a year earlier. The number also hovered above the market consensus that had forecast a net profit of 987.7 billion won by FnGuide.

Hana Financial Group saw an increase in interest income amid rate hikes, and its net interest margin added 0.02 percentage point to 1.82 percent. Its mainstay Hana Bank reported a net profit of 878 billion won, up 23.79 percent on quarter and 26.17 percent on year.

Woori Financial Group reported 899.8 billion won in net profit for the third quarter, off 2.5 percent on quarter but up 15.7 percent on year. Cumulative net income reached 2.66 trillion won as of September, already exceeding last year¡¯s annual income of 2.59 trillion won. Woori Bank earned 2.37 trillion won as of September and Woori Card 179.2 billion won.

On Tuesday, shares of Shinhan Financial Group closed 0.56 percent higher at 35,900 won, and Hana Financial 0.93 percent up at 38,150 won. Woori Financial Group shares rose 0.44 percent to end at 11,500 won.

[¨Ï Maeil Business Newspaper & mk.co.kr, All rights reserved]