Korean financial groups such as Hana and Shinhan Financial have been doing well overseas recently, with combined net profit in the first quarter coming to 134 billion won, up 23.6 billion won from the preceding quarter and up 21 billion won year-on-year.

Hana Financial Group in particular has done exceedingly well by recording 51.3 billion won in net profit in Q1, a massive increase from 11.8 billion won in net profit in the last quarter of 2014, which is quits an increase given the fact that a loss provision was extracted from Q4 profit. The Q4 net profit was greater than that of Q1 (39.1 billion won) and Q3 (45.7 billion won). The group has 135 outlets overseas, most of which are branches or other outlets of its main affiliates Hana Bank and the Korea Exchange Bank.

During the first three months of the year, Hana Bank earned a net income of 260.8 billion won, down 18.2 billion, or 6.5 percent, year-on-year, but after deducting the one-time profit of 113 billion won from the integration of the Indonesian subsidiaries of the two banks in 2014, it actually represents an increase of 63.7 billion won, or 32.3 percent year-on-year. Core earnings (net interest income plus commission income) and gains from sales and valuation rose by 2.4 billion won and 77.4 billion won, respectively, indicating an improvement in the operating profit structure.

NIM fell by 0.03 percentage points from the preceding quarter to 1.39 percent, as the low interest trend continued with the Bank of Korea’s reduction of the base interest rate. Also, ROE and ROA, which are major performance indicators, declined by 2.97 and 0.19 percentage points, respectively, year-on-year to 7.73 and 0.57 percent. Finally, the cost-income ratio dropped 1 percentage point year-on-year to 50.9 percent, while the credit-cost ratio fell 0.10 percentage points year-on-year to 0.25 percent.

KEB earned 122.1 billion won during the first three months of this year, up 51.6 billion won, or 73.2 percent year-on-year, largely due to disposition and valuation gains ( 82.8 billion won) and profits relating to exposure to Samsung Motor (24.6 billion won). Core earnings decreased by 71.4 billion won year-on-year.

NIM fell 0.03 percentage points from the preceding quarter to 1.48 percent, as the low interest trend continued with the Bank of Korea’s reduction of the base interest rate. ROE and ROA increased 1.62 and 0.10 percentage points to 4.96 and 0.40 percent, respectively. The cost-income ratio dropped 4.3 percentage points year-on-year to 57.8 percent, while the credit-cost ratio improved by 0.06 percentage points year-on-year to 0.60 percent.

Net income for the first quarter this year is the highest quarterly income recorded since the second quarter of 2014, largely thanks to a favorable rise of commission income and disposition and valuation gains, as well as decreased provisioning for loan losses.

Commission income rose by 53.5 billion won year-on-year to 466.9 billion won, up 12.9 percent due to a balanced increase in trust fees, brokerage fees and M&A advisory fees. Disposition and valuation gains rose 205.3 billion won, or about 546 percent, to 242.8 billion won, while new reserves for loan losses decreased by 35.6 billion won, or 11.9 percent year-on-year. Core income stood at 1.5867 trillion won, up 29.6 billion won, or 1.9 percent year-on-year.

The cost-income ratio, which shows costs in relation to income, was down 4 percentage points year-on-year to 58.7 percent, while the credit-cost ratio declined 0.06 percentage points year-on-year to 0.45 percent.

Total assets increased by 5.6 trillion won, up 1.4 percent over the preceding quarter, to  396.1 trillion won. Due to a readjustment of the loan portfolio to enhance profitability, loans granted to large corporations declined while loans to small and medium-sized enterprises increased. Also, the low-cost core deposit stood at 35.7 trillion won, up 1.1 trillion won, or 3.3 percent, over the previous quarter.