South Korean major commercial lenders are estimated to have earned a record 16 trillion won ($10.9 billion) in net profit last year. The four are KB Financial Group Inc., Shinhan Financial Group Co., Woori Financial Group, and Hana Financial Group Inc.

Financial data provider FnGuide Inc. found that the four financial giants are expected to report a total net profit of 16.8 trillion won for 2024. This was up 11 percent from 2023 and would set a new record high. Market projections indicate that KB Financial Group alone will likely achieve 5 trillion won in net profit.

The four banks under the financial conglomerates lowered deposit rates while increasing loan rates in 2024, all of which boosted their interest income levels. The widening gap between loan and deposit rates contributed to a sharp increase, particularly in net profits.

The lenders have consistently raised additional interest rates on loans since July 2024 citing the need to slow household debt growth. In contrast, they have cut deposit rates following the central bank’s decision on cutting the policy rate, allowing them to collect more interest while paying out less.

Data from the Korea Federation of Banks reveals that the spread between new deposit and loan rates at the four major banks has steadily widened from 0.94 percentage points in August 2024 to 1.46 percentage points by December.

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