'Record High Despite ELS Loss Compensation'... Financial Holding Companies Surpass 20 Trillion Won in Net Profit for 4 Consecutive Years

Financial Holding Companies Achieve Record-High Net Profit
Driven by Strong Bank, Insurance, and Investment Performance

Financial Supervisory Service, Yeouido, Seoul. Photo by Younghan Heo younghan@

Last year, the net profit of financial holding companies nearly reached 24 trillion won, marking an all-time high. Despite reflecting compensation losses from Hong Kong H-Share Index (Hang Seng China Enterprises Index·HSCEI)-related equity-linked securities (ELS), strong performance was sustained thanks to continued benefits from high interest rates.

According to the "2024 Financial Holding Companies' Business Performance" report released by the Financial Supervisory Service on the 16th, the net profit of 10 financial holding companies (KB, Shinhan, Hana, Woori, NH, iM, BNK, JB, Hantoo, Meritz) was 23.8478 trillion won, an increase of 10.8% (2.3232 trillion won) compared to the previous year. Following 21.189 trillion won in 2021, 21.447 trillion won in 2022, and 21.5 trillion won in 2023, this marks the fourth consecutive year surpassing 20 trillion won.

By sector, banks accounted for the largest share of profits at 59.8% (16.3 trillion won) of the total. This was followed by insurance with 3.9 trillion won (14.3%), financial investment with 3.2 trillion won (11.7%), and specialized credit finance companies (cards, capital, savings banks, etc.) with 2.6 trillion won (9.4%).

The record-breaking performance of financial holding companies was driven by banks, insurance, and financial investment sectors. Bank net profits increased by 6.3% (962.8 billion won), insurance by 16.5% (551.6 billion won), and financial investment by 15.2% (422.5 billion won). Conversely, specialized credit finance companies saw a decrease of 5.8% (159.1 billion won).

Last year, the total assets of the 10 financial holding companies reached 3,754.8 trillion won, up 224 trillion won (6.3%) from the previous year. Banks increased by 167.1 trillion won (6.3%), financial investment by 40.1 trillion won (11.0%), insurance by 12.7 trillion won (5.3%), and specialized credit finance companies by 0.4 trillion won (0.2%).

The ratio of non-performing loans (NPLs) classified as substandard or below for financial holding companies stood at 0.90% at the end of last year, up 0.18 percentage points from the previous year. The loan loss provision coverage ratio, an indicator of credit loss absorption capacity, was 122.7%, down 27.9 percentage points from the previous year.

A Financial Supervisory Service official explained, "The asset growth trend of financial holding companies will continue in 2024, and net profits increased compared to the previous year, with solid performance in the banking, financial investment, and insurance sectors." However, they added, "While key management indicators such as capital adequacy remain sound, strengthened management of asset quality is necessary as the ratio of non-performing loans has risen."

They further stated, "This year's supervisory direction will focus on continuously monitoring and responding to potential risks of financial holding companies amid ongoing domestic and international uncertainties in the financial market. Additionally, to prepare for unexpected environmental changes such as mutual tariffs, we will strengthen financial support functions to underpin financial stability and economic development."