South Korea’s major financial holding companies are expected to fare worse in 2013 than this year due mainly to a decline in interest income amid persistent low interest rates, a financial information provider said Sunday.

The combined net income of the four major bank holding companies ― KB Financial Group Inc., Woori Finance Holdings Co., Shinhan Financial Group and Hana Financial Group ― is predicted to reach 7.32 trillion won ($6.82 billion) next year, down 9.5 percent from this year’s estimate, according to FnGuide.

The holding firms are forecast to post a combined net profit of 8.08 trillion won this year, down 22.9 percent from the 10.49 trillion won recorded by the four firms and Korea Exchange Bank.

In February this year, Hana Financial acquired Korea Exchange Bank from U.S. private equity firm Lone Star Funds and placed the lender under its wing.

The expected drop in the earnings of the bank holding firms was attributed to a drop in net interest margins and the lack of one-off factors.

On Thursday, the Bank of Korea froze the key interest rate at 2.75 percent for the second straight month, citing global economic uncertainty.

In mid-February, creditor banks of Hynix Semiconductor Inc. completed the sale of a 21.05 percent stake in the world’s No. 2 memory chip maker for 3.37 trillion won, posting big special profits.

South Korea’s financial authorities have also expected the profitability of local banks to worsen in the coming year.

“The local banking industry is expected to face great difficulties down the road,” BOK Gov. Kim Choong-soo told reporters after Thursday’s rate-setting meeting. “In order to minimize risks, banks should diversify profit sources and restructure operations.”

In a recent report, the Financial Supervisory Service warned that bank profits would tumble 83.5 percent in 2017 from this year should the country’s economic growth rate drop to the 1 percent range and interest rates decline 1 percentage point from the current level. (Yonhap News)