Korean financial groups to post weak 2023 earnings due to lower NIM

[Photo by Yonhap]

South Korea’s four major financial groups are expected to report lackluster earnings growth in 2023 that falls short of market expectations due to lower net interest margin (NIM) and piling reserves.

According to financial data tracker FnGuide Inc. on Sunday, the country’s four financial groups - KB Financial Group Inc., Shinhan Financial Group Co., Hana Financial Group Inc., and Woori Financial Group - are estimated to post a combined net profit of 15.9 trillion won in 2023, up 0.69 percent from the previous year. In 2022, the combined net profit gained by nearly 9 percent.

Market observers noted that the financial groups’ earnings in the first half of 2024 could remain weak amid rising uncertainty involving equity-linked securities (ELS) tied to the Hang Seng China Enterprises Index (HSCEI) and the real-estate sector’s growing risk of PF default.