Increase in Net Interest Margin, Loan Assets Also Soar
Big Four Financial Groups' Net Profit Expected to Exceed 14 Trillion Won
Each Bank to Pay 300% Performance Bonus on Base Salary
[Asia Economy Reporter Shim Nayoung] Although the economy shows no signs of recovery amid the prolonged COVID-19 pandemic, the financial sector, centered on banks, has experienced a different situation. Last year, the four major financial holding companies recorded an unprecedented performance exceeding 14 trillion won, and accordingly, they held a bonus celebration by giving performance bonuses amounting to half of the annual salary.
According to the financial industry and FnGuide on the 6th, the market consensus net profit for last year of the four major financial holding companies, including KB Financial Group, Shinhan Financial Group, Hana Financial Group, and Woori Financial Group, was estimated at 14.5653 trillion won. This represents an increase of about 33.76% compared to 2020 (10.8143 trillion won).
This was thanks to the strong performance of affiliates centered on banks. Interest rate hikes increased the net interest margin, and loan assets also surged significantly. The Korea Institute of Finance explained, "Last year, household loans increased, and funding support for small and medium-sized enterprises and small business owners expanded, leading to a rapid increase in banks' loan assets and resulting in higher net profits."
The increased earnings of bank holding companies last year were distributed as performance bonuses this year. KB Kookmin Bank set the performance bonus at 300% of the monthly ordinary wage. This is a significant jump compared to the previous year’s 200% plus 1.5 million won. Shinhan Bank employees also received about 300% of their base salary and were given 1 million My Shinhan Points as a special payment.
Woori Bank employees also agreed to receive more than 300% of their base salary. Recently, Woori Bank’s labor and management agreed to pay a management performance bonus of 200% of the base salary, and additionally, to boost morale, they decided to pay 100% of the base salary plus 1 million won. Hana Bank also decided to give a special performance bonus of 300% of the base salary.
The four major financial holding companies will consecutively announce their fourth-quarter and annual results this week. Starting with KB Financial on the 8th, Shinhan Financial Group and Woori Financial Group will announce on the 9th, and Hana Financial Group’s results are scheduled for the 10th.
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