Korea's Financial holding firms break 21 trillion won in net profit

Korean financial holding companies' net profit exceeded 21 trillion won in 2023 aided by high interest rates.

The Financial Supervisory Service building in Yeouido, western Seoul [YONHAP]

Korean financial holding companies' combined net profit broke 21 trillion won ($15.6 billion) in 2023, up 0.4 percent from a year earlier, helped by high interest rates, the Financial Supervisory Service (FSS) said Tuesday.

The country's 10 financial holding firms reported an estimated net profit of a record 21.5 trillion won last year, the financial regulator said in a statement.

Their combined net profit has now surpassed 20 trillion won for three consecutive years.

The 10 firms are KB Financial Group, Shinhan Financial Group, NongHyup Financial Group, Hana Financial Group, Woori Financial Group, BNK Financial Group, DGB Financial Group, JB Financial Group, Korea Investment Holdings, and Meritz Financial Group.

The 10 companies have a total of 329 financial affiliates, including banks, insurers and financial investment firms. Their net profit was largely driven by flagship banks.

“Last year, local banks' net profit rose when increased interest income and insurers' net income jumped due to changes in accounting methods adopted in their financial results from 2023,” an FSS official said over the phone.

Banks' net income rose 5.4 percent year over year to 786.3 billion won in 2023, and insurers' net profit jumped 44 percent to 1.015 trillion won during the same period, the statement said.

In contrast, financial investment firms' net profit fell 38 percent on year to 1.698 trillion won and credit card companies' declined 25 percent to 890.2 billion won, it said.

As of the end of 2023, the 10 holding groups had a combined 3,530.7 trillion won in assets, up 3.3 percent from the 3,418.1 trillion won reported a year ago, while their nonperforming loan (NPL) ratio was 0.72 percent, up 0.23 percentage points during the cited period.

“Financial authorities will be closely monitoring on any possibility of credit risks resulting from increasing NPLs in the financial sector,” the official said.

BY JIN MIN-JI, YONHAP [jin.minji@joongang.co.kr]