The nation’s top banking groups share the goal of boosting profitability by any means this year. But they have different ways of reaching that goal.

Each has a different picture in mind for implementing a path to profitability, with some focusing more on leadership and others on mergers.

Last year, Shinhan Financial Group, KB Financial Group, Hana Financial Group and NH Financial Group recorded 2.08 trillion won ($1.89 billion), 1.4 trillion won, 938 billion won and 768.5 billion won in net profit, respectively.

For the latter two, their net profit was lower than that of Woori Bank and the Industrial Bank of Korea. Even with relative success in terms of profits, they have been preoccupied with a recent change of leadership or ongoing merger talks.

The No. 1 player, Shinhan Financial, will be focusing on establishing the leadership of the newly appointed bank president Cho Yong-byeong, who will be starting his two-year term in office on March 26.

The nomination of the former BNP Paribas Asset Management CEO, who has taken a neutral stance among different power cliques within Shinhan Group, was seen as a sign that the group would henceforth focus on business performance.

The leading banking group is also largely aware that runner-up Hana Financial, should it succeed in merging Hana Bank with Korea Exchange Bank this year, may come close on its heels.
 

Seeking growth momentum, Shinhan recently said it would more closely analyze the earnings rates of its financial products and reflect the result in the key performance index of each corresponding financial manager.

KB Financial, which is slowly stabilizing under the leadership of chairman Yoon Jong-kyoo, has two major goals: to reclaim its former glory as the nation’s leading bank and to reinforce its relatively weak nonbanking sectors.

To achieve its goals, the group is keeping an eye on possible mergers and acquisitions, hoping to create synergy with its conventional banking business.

Last year, the group obtained the approval of the Financial Services Commission to take over LIG Insurance. It is also speculated to have an eye on KDB Daewoo Securities, which will be up for sale this year.

Hana Financial Group is relatively stable in terms of leadership as chairman Kim Jung-tae is expected to serve for another three years. But the persisting feud over the interbank merger and the related consequences are complicating operations.

Hana Bank recorded 856 billion won in profits last year, up 21.2 percent from the previous year, but the figure for KEB was 365 billion won, down 18 percent.

“(Should situations remain this way), the performance of KEB may soon be outrun by that of Busan Bank,” chairman Kim told reporters last month, at the inauguration ceremony of new bank president Kim Byoung-ho.

He thus exercised pressure on the KEB labor union, which is continuing to resist the earlier-than-expected merger with its sister bank.

NH Financial Group, based on the nation’s agricultural cooperative, is standing at a crossroads due to the leadership vacuum caused by the sudden resignation of chairman Lim Jong-yong. Lim was nominated last month as the next FSC chairman to replace current chief Shin Je-yoon.

During his term, Lim not only improved the net profit by 162 percent but also successfully clinched the deal to take over Woori’s brokerage houses, a feat which at once made NH Financial the nation’s third-largest banking group in terms of assets.

By Bae Hyun-jung (tellme@heraldcorp.com)