A composite image shows the headquarters of Korea's four largest financial holding companies: Shinhan, Woori, KB and Hana. Courtesy of Shinhan, Woori, KB and Hana

Korea’s four largest financial groups — KB, Shinhan, Hana and Woori —posted a combined 5.32 trillion won ($3.61 billion) in net profit for the first quarter of this year, marking a record high, company officials said Friday.

The three top lenders individually set new highs for quarterly earnings, while Woori saw its net income inch down.

Their performance was driven largely by stronger interest income as lending rates rose under the government pressure to curb household debt, alongside a surge in noninterest income amid a red-hot stock market rally. The recorded earnings came despite foreign exchange transaction losses stemming from the won’s weakness against the dollar.

According to financial market data, KB Financial maintained its lead with a net profit of 1.89 trillion won, up 11.5 percent from a year ago. Shinhan followed with 1.62 trillion won, up 9 percent.

Hana Financial logged 1.21 trillion won, the highest-quarterly net profit since the 2015 integration of Hana Bank and Korea Exchange Bank, while Woori became the only player with a decreased net profit of 604 billion won, down 2.1 percent.

A rise in market interest rates provided the backbone for the record-high earnings, lifting combined interest income for the four groups to 11.15 trillion won.

At KB, Shinhan and Hana, profitability in core lending operations improved, with net interest margins climbing to 1.99 percent, 1.93 percent and 1.82 percent, respectively. Tighter government regulations on household lending made it difficult for banks to lower loan rates aggressively, helping sustain wider margins.

KB and Shinhan also saw strong gains in noninterest income, benefiting from buoyant equity markets. The two recorded 1.65 trillion won and 1.18 trillion won, respectively. Fee income tied to stock market activity, including brokerage custody, funds and trust services, rose sharply, driving double-digit growth.

This meant that the groups’ nonbank securities affiliates accounted for a noticeably larger share of overall net profit.

Source: Korea Times News