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(Photo= Yonhap news) |
[Alpha Biz= Reporter Paul Lee] In the first quarter of this year, the net profit of capital affiliates of the four major financial groups, including Shinhan, KB, Hana, and Woori Financial, decreased by 10% compared to the same period last year. This decline is attributed to the continued high interest rates, which have increased funding costs.
According to data from Shinhan Financial Group released on the 7th, Shinhan Capital recorded a net profit of 643 billion won in the first quarter of this year. This represents a 30.2% decrease compared to the same period last year (922 billion won).
During the same period, Hana Capital recorded a net profit of 602 billion won, an 8.3% decrease from the same period last year (656 billion won), while Woori Financial Capital's net profit decreased by 15.4% from the previous year (390 billion won) to 330 billion won. KB Capital, on the other hand, was the only one to achieve growth in performance, with a net profit of 616 billion won, a 31.3% increase from the previous year (469 billion won).
While the combined net profit of the four companies in the first quarter of last year was 2.437 trillion won, this year it decreased by 10% to 2.191 trillion won. The decrease in net profit is attributed to the high interest rates. According to the Korea Financial Investment Association's Bond Information Center, the average interest rate for three-year corporate bonds issued by capital companies in the first quarter of this year remained in the 4% range, averaging 4.017% as of March 29.
Additionally, the risk of real estate project financing (PF) also had an impact. A representative from the capital industry explained, "Overall, the industry has seen a decrease in profit due to proactive provisioning for the downturn in the real estate market."
With high interest rates expected to continue for the time being, capital companies are expected to focus on reducing cost burdens. A representative from the capital industry stated, "As the impact of high interest rates is expected to continue for the time being, we plan to focus on minimizing cost burdens."
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
