Key S. Korean financial firms to see decrease in interest income for 1st time in 5 yrs
Seoul, Dec. 7 – According to market‑researcher FnGuide data released Sunday, four of Korea’s top banks are expected to record their first decline in interest income since 2020, a consequence of the government’s stricter lending rules aimed at cooling the housing boom. The four institutions – KB Financial Group, Shinhan Financial Group, Hana Financial Group and Woori Financial Group – are projected to earn a combined 101.47 trillion won (about US$68.8 billion) in interest this year, falling by roughly 4 % from the previous year. This marks the first time in five years that the group’s interest earnings have slipped year‑on‑year. The banks had enjoyed a four‑year streak of rising interest income following the 2020 dip caused by the COVID‑19‑related drop in borrowing costs.
The downturn is linked to new regulations, including a 600‑million‑won ceiling on mortgage loans for homes in the capital area, part of the government’s effort to tame soaring property prices. “Interest revenue has not grown because of stricter rules on household loans, and the outlook for future interest income does not look very promising either as this approach is expected to continue into next year,” an unnamed firm official told reporters.
Despite the hit to interest earnings, the group’s overall profits are still rising. Net income across the leading banks is forecast to reach a record 18.5 trillion won this year, up more than 10 % from 16.5 trillion won in 2024. “Significant rise in non‑interest income, such as securities brokerage fees, investment banking fees and gains from marketable securities, can be attributed to the strong performance,” the same official added, noting that the Bank of Korea has moderated its rate cuts more than initially expected. By individual estimate, KB Financial should net 5.75 trillion won (up 14.4 %), Shinhan 5.25 trillion (up 15 %), Hana around 4.1 trillion (up 9 %) and Woori about 3.4 trillion (up 8 %). — LatestNewsX
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