KB Financial Group achieved record earnings of over W3 trillion last year to beat rival Shinhan to become the No. 1 banking group for the first time since its launch in 2008 (US$1=W1,090).
KB overtook Shinhan not only on net profit but on market cap and stock price. Industry watchers said Shinhan failed to stick to its trademark adventurous and challenging management style.
KB on Thursday announced a net profit of W3.31 trillion in 2017, up 54.5 percent from the previous year. Its shares closed at W61,400 while Shinhan's stood at W49,600. KB's total market cap stands at W25.7 trillion compared to W23.5 trillion for Shinhan.
Shinhan's annual net profit rose a mere 5.2 percent on-year to W2.92 trillion, although the group broke the W3 trillion mark earlier in 2011.
The retail banking subsidiaries of KB and Shinhan played a decisive role in their performance. KB Bank's net profit reached W2.18 trillion, up 125.1 percent, while Shinhan Bank's fell 11.8 percent to W1.71 trillion. Even KEB Hana Bank achieved a higher net profit than Shinhan at W2.1 trillion.
Shinhan blamed the weak earnings performance to severance payments for workers who opted for voluntary retirement in the fourth quarter of last year. Its one-off costs totaled W450 billion, including W285 billion in severance payments.