Chairman Cho Yong-byoung of Shinhan Financial Group. (Photos: SFG)

Shinhan and KB financial groups, the two leading financial groups in Korea, have been competing to lead the operational results in the 1st half of this year, with Hana Financial Group right behind them in 3rd.

FnGuide said the leading four financial groups 2nd quarter results will be led by KB with 924.9 billion won, exceeding 910.1 billion won of Shinhan Financial Group.

Shinhan is projected to keep its leading position with 1.8828,5 trillion won in net profit ahead of KB’s 1.770,6 trillion won, thanks to the fact that early retirement payments (35 billion won) and the welfare installment (101.1 billion on) set aside have been charged to the Q1 results.

Hana has been projected to take 3rd place, beating Woori with the Q2 net profit estimated at 641.4 billion won, around 100 billion won more than its closest rival. Hana’s H1 net profit is projected to total 1.197,4 trillion won, above the 1.1 trillion won projected for Woori.

An analyst with Korea Investment and Securities said NIM, the key factor for counting net profits for the banks, was expected to drop 0.01 percent from the preceding quarter due mainly to the economic slowdown that pulled down interest rates on loans.

There also has been fear that the financial institutions may get hurt by the slowdown in small business firms and small business owners in the Q2, but so far it has yet to grow serious enough, an analyst said, thanks to a number of sound policies, the banks measures taken to protect their loans, and the fall in interest rates, reducing the financial burdens on the borrowers, he added.

Korea's big four financial groups, which enjoyed record earnings last year, won't continue their momentum in the first quarter of this year, according to a financial researcher.

FnGuide said July 3 that the big four financial groups - Shinhan, KB, Woori and Hana Financial Group - were estimated to have posted a combined 2.87 trillion won ($2.51 billion) net profit in the first quarter of this year, down 7.6 percent year-on-year from 3.11 trillion won.

Of them, Shinhan Financial Group is forecasted to reach a 905 billion won net profit in the first quarter, up 4.1 percent from a year ago. HMC Investment Securities and KTB Investment said the group's earnings will reach 910 billion. Of the four, Shinhan is the only firm that will posts year-on-year growth in the period.

“Shinhan acquired Orange Life last year. The insurer's earnings start to be reflected in the group’s net profit from the first quarter of this year.” said a Shinhan Financial Group official.

“I can't elaborate further since the group’s Q1 net profit has yet to be officially announced, but Orange's earnings stood at 340 billion won last year. The insurer's entry is a huge lift to the group.”

Shinhan is also very likely to maintain the nation's leading financial group status as KB is expected to post an 828 billion won net profit, down 14.5 percent from a year ago.

Shinhan had been the nation's leading financial group in earnings for nine consecutive years until KB claimed the position in 2017. The former retake the leader position last year thanks to its solid numbers in household loan sector.

Hana Financial Group is also expected to suffer a 14.8 percent decline in earnings to 582 billion won in the first quarter.

The net profit of Woori, which turned itself into a holding company structure last year, is forecasted to fall by 31.5 billion won to mark 563 billion won.