KRW 6.2 trillion net profit in the first half…Financial groups to have earned easy money thanks to ‘interest business’
[ Cho Eun Guk ceg4204@ ] | 2017-09-27 11:34:26
Eight financial holding companies in Korea recorded their highest performance in the past four years, earning more than KRW 6 trillion in the first half of this year. However, most of the banks based on interest income from household loans, including mortgage loans, and diversification of profits has become an urgent task. Major Banks are increasingly voicing their desire to diversify their profit margins by investing in global markets and venturing investment banks (IB as well as politicians and financial institutions).
According to the Financial Supervisory Service (FSS) on September 26, eight financial holding companies such as KB Financial Group, Shinhan Financial Group, Hana Financial Group, and Nonghyup Financial Group reported net income of KRW 6 trillion 193 billion, up 64.8 % from the same period of last year.
The Financial Supervisory Service analyzed that the financial holding company`s earnings surprise was due to an increase in interest income as net interest margins improved due to interest rate hikes. Especially, the Financial Supervisory Service pointed out that while the bias in the banking sector is steadily declining among financial holding company assets, ‘banking degree’ has been steadily rising as most of its profits are collected from banking services.
Financial institutions have been diagnosed by the fact that bank holding companies have been able to record large profits in the first half of this year due to excessive bank lending by commercial banks. In the first half of the year, household loans, including mortgage loans, surged in the short term, which helped to maximize interest income.
The total amount of domestic banks` lending increased by 1.82% (KRW 20.72 trillion) from KRW 1135.69 trillion at the end of last year to KRW 1156 trillion 419.9 billion as of the end of June, while household loans increased from 577.881 trillion won to 589 trillion 133 billion won 1.99%.
Household lending growth exceeded the overall loan growth. Especially, as of the end of June, the mortgage loan amounted to KRW 424.77 trillion, which accounted for 72.1% of total household loans, which is the largest contributor to profitability of commercial banks.
Experts are also diagnosing that domestic commercial banks have easily sold their interest based on mortgage loans with low risk. In political circles and financial authorities, domestic banks are not only comfortable with the easy mortgage market, but also actively enter overseas financial markets and actively invest in IB businesses that invest in venture companies or new industries.
Since the inauguration of the Finance Committee chairman of the Financial District Committee, "banks have been operating a puddle business that only increases mortgage loans. Serious troubles are necessary even for the future of the banking industry."
Lee Jin-bok, chairman of the National Assembly, said, "The banks have been making so much money easily through their business and commission fees. Banknotes should also actively enter the IB industry and enhance their global competitiveness."
By Cho Eun Guk ceg4204@
[ copyright ⓒ The Digitaltimes ]
According to the Financial Supervisory Service (FSS) on September 26, eight financial holding companies such as KB Financial Group, Shinhan Financial Group, Hana Financial Group, and Nonghyup Financial Group reported net income of KRW 6 trillion 193 billion, up 64.8 % from the same period of last year.
The Financial Supervisory Service analyzed that the financial holding company`s earnings surprise was due to an increase in interest income as net interest margins improved due to interest rate hikes. Especially, the Financial Supervisory Service pointed out that while the bias in the banking sector is steadily declining among financial holding company assets, ‘banking degree’ has been steadily rising as most of its profits are collected from banking services.
Financial institutions have been diagnosed by the fact that bank holding companies have been able to record large profits in the first half of this year due to excessive bank lending by commercial banks. In the first half of the year, household loans, including mortgage loans, surged in the short term, which helped to maximize interest income.
The total amount of domestic banks` lending increased by 1.82% (KRW 20.72 trillion) from KRW 1135.69 trillion at the end of last year to KRW 1156 trillion 419.9 billion as of the end of June, while household loans increased from 577.881 trillion won to 589 trillion 133 billion won 1.99%.
Household lending growth exceeded the overall loan growth. Especially, as of the end of June, the mortgage loan amounted to KRW 424.77 trillion, which accounted for 72.1% of total household loans, which is the largest contributor to profitability of commercial banks.
Experts are also diagnosing that domestic commercial banks have easily sold their interest based on mortgage loans with low risk. In political circles and financial authorities, domestic banks are not only comfortable with the easy mortgage market, but also actively enter overseas financial markets and actively invest in IB businesses that invest in venture companies or new industries.
Since the inauguration of the Finance Committee chairman of the Financial District Committee, "banks have been operating a puddle business that only increases mortgage loans. Serious troubles are necessary even for the future of the banking industry."
Lee Jin-bok, chairman of the National Assembly, said, "The banks have been making so much money easily through their business and commission fees. Banknotes should also actively enter the IB industry and enhance their global competitiveness."
By Cho Eun Guk ceg4204@