This year in the first half, domestic financial holding companies recorded a net profit of 17.6 trillion Korean won, marking the highest semi-annual performance in history. While profits from banking subsidiaries decreased, financial investment subsidiaries, including securities firms, saw their profits surge by over 70% due to favorable stock market conditions, driving overall performance. However, the ratio of non-performing loans increased, while the ratio of provisions set aside for bad loans declined.
According to the Financial Supervisory Service’s (FSS) announcement on the 8th regarding the ‘2026 First Half Financial Holding Company Management Performance,’ the combined net profit of 10 financial holding companies—KB, Shinhan, Hana, Woori, NH, iM, BNK, JB, Korea Investment, and Meritz—was 17.6 trillion Korean won in the first half, a 13.7% increase from the same period last year. This accounts for approximately 66% of the annual net profit of 26.7 trillion Korean won recorded last year.
By sector, the net profit of financial investment subsidiaries reached 5.1 trillion Korean won on an individual basis, a 72.8% increase from a year ago. In contrast, banking subsidiaries reported 9.6 trillion Korean won, a 7.9% decrease. The proportion of profits attributable to banks among all subsidiaries (excluding holding companies) fell from 59% to 47.1%, while the share of financial investment subsidiaries rose from 16.6% to 24.9%.
The FSS explained, “Commissions and gains from securities increased due to favorable stock markets, and foreign exchange-related profits also rose significantly due to fluctuations in exchange rates and interest rates.” Interest income also grew as interest-bearing assets, such as corporate loans, expanded. Net profits in insurance and credit-specialized finance sectors, including credit cards and capital, increased by 6.5% and 36.8%, respectively.
As of the end of June, the total assets of financial holding companies amounted to 4,391 trillion Korean won, an 8% increase from the end of last year. Assets in the financial investment sector grew by 27%, outpacing the 6.1% growth in the banking sector.
Meanwhile, asset health indicators deteriorated. The ratio of substandard or below loans (고정이하여신비율) rose from 0.95% at the end of last year to 1.03%. The ratio of loan loss provisions relative to non-performing loans decreased from 106.8% to 96.5%, meaning that provisions set aside for every 100 Korean won of non-performing loans fell below 100 Korean won.
The FSS stated that as the proportion of the financial investment sector, which is sensitive to market fluctuations, has grown, it is necessary to strengthen the management of subsidiaries’ soundness and internal controls. It plans to encourage preparations for interest rate hikes and geopolitical risks, and to enhance inspections on the expansion of high-risk assets and improper business practices.
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