Financial holding firms’ combined net profit edges up in 2023

South Korean financial holding companies’ combined net profit rose 0.4 percent in 2023 from a year earlier, helped by high interest rates, the financial regulator said Tuesday.

The country’s 10 financial holding firms reported an estimated net profit of 21.5 trillion won (US$15.9 billion) last year, up from 21.4 trillion won a year ago, the Financial Supervisory Service (FSS) said in a statement.

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

They have a total of 329 financial affiliates, including banks, insurers and financial investment firms.

“Last year, local banks’ net profit increased on increased interest income and insurers’ net income jumped due to changes in accounting methods (which were) 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 3,418.1 trillion won a year ago, while their non-performing loan (NPL) ratio was at 0.72 percent, up 0.23 percentage point 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.