[비즈한국] KB Financial Group105560 and Shinhan Financial Group have long competed for the top spot among financial holding companies. While Shinhan Financial Group led in net profit from 2018 to 2019, KB Financial Group took the lead in 2020 and 2021. In 2022, Shinhan Financial Group recorded a net profit of 4.7322 trillion won, surpassing KB Financial Group’s 4.1732 trillion won. However, KB Financial Group has outperformed Shinhan in net profit once again in 2023 and 2024, and Shinhan has been unable to reclaim the title of the number one financial holding company since 2022.
KB Financial Group continues to lead this year as well. For the first three quarters of this year, KB Financial Group posted a net profit of 5.1217 trillion won, while Shinhan Financial Group recorded 4.4609 trillion won. Although the fourth quarter remains, it is highly likely that KB will maintain its lead unless there are significant changes. Given that the fourth quarter is a slow season, it is difficult to expect any extraordinary improvement in performance.
Cheon Sang-young, Deputy President of the Finance Division at Shinhan Financial Group, stated, "We are maintaining stable profit-generating capacity through balanced growth, expanded fee income, and cost management, despite the challenging external business environment," but added, "In the fourth quarter, the growth of interest income is expected to be limited due to margin compression and a slowdown in household loan growth."
In fact, looking only at the core subsidiaries of the two groups—Shinhan Bank and Kookmin Bank—the gap is not large. Shinhan Bank's net profit for the first three quarters of this year was 3.3561 trillion won, while Kookmin Bank's was 3.3645 trillion won. Despite this, the non-banking sector is cited as the reason why KB Financial Group is significantly outperforming Shinhan Financial Group.
KB Financial Group's non-banking subsidiaries, such as KB Securities, KB Insurance, KB Kookmin Card, KB Life Insurance, and KB Capital, all recorded hundreds of billions of won in net profit during the first three quarters of this year. Yang Jong-hee, Chairman of KB Financial Group, also emphasized the non-banking sector in his 2024 New Year's address, stating, "We will promote the leap of our non-banking subsidiaries to the top tier, not just our banking business, by refining growth strategies for each affiliate to provide the best value to our customers."
In the case of Shinhan Financial Group, non-banking subsidiaries like Shinhan Life and Shinhan Securities have performed well, but they are still considered to fall short compared to KB. Shinhan Card’s net profit even dropped by 31.17%, from 552.7 billion won in the first three quarters of last year to 380.4 billion won this year. It is not that Shinhan Financial Group lacks the will to strengthen its non-banking sector. At the beginning of 2023, the group announced a plan to increase the proportion of non-banking profits to 50% by 2030. However, while the proportion of non-banking profit hovered in the mid-30% range in 2023 and 2024, it is reported to have fallen below 30% this year.
In the financial industry, rumors circulated last year about Shinhan Financial Group acquiring Lotte Insurance. However, these remained mere rumors, and it is reported that no substantial negotiations took place. Recently, there hasn't even been any news regarding potential mergers and acquisitions (M&A). While reckless M&A activity should be avoided given the uncertain business environment, there are no clear measures in sight to strengthen the non-banking sector.
Kiwoom Securities039490 has projected the 2026 net profits for KB Financial Group and Shinhan Financial Group at 5.816 trillion won and 5.488 trillion won, respectively. If these forecasts hold true, KB Financial Group will continue to lead Shinhan Financial Group next year. Analysts suggest that for Shinhan Financial Group to defy expectations and reclaim the top spot, it must ultimately focus on strengthening its non-banking business.
The term of Chairman Jin Ok-dong, who leads Shinhan Financial Group, ends in March next year. Coincidentally, since Jin took office in 2023, Shinhan Financial Group has been unable to overtake KB Financial Group. Although Chairman Jin has not officially expressed his intention to seek re-election, rumors of a potential term extension are circulating in the financial sector. This is because, despite trailing KB, Shinhan Financial Group's performance is on an upward trend. If Chairman Jin succeeds in being reappointed, it is expected that he will prioritize the strengthening of the non-banking sector.