[DigitalToday reporter Sangyeop Oh (오상엽)] Financial holding companies and banks continued to announce third-quarter earnings. Woori Bank posted its biggest quarterly net profit on record, and Hana Financial Group increased cumulative net profit on rising fee income. Brokerages, meanwhile, faced growing pressure from weaker profitability as trading value declined and market rates rose.

Woori Financial Group's year-to-date net profit for the third quarter was 2.66 trillion won, down 4.93 percent from a year earlier. Base effects from one-off gains during last year's insurance company acquisition process were reflected. Third-quarter net profit topped 1 trillion won, marking the first time since the group's launch that it posted 1 trillion won-plus results for two consecutive quarters.

Woori Bank also posted net profit of more than 1 trillion won in the third quarter, shaking off weak first-half results. Higher cumulative net interest income from expanding corporate loans, an increase in non-interest income in the third quarter and eased pressure from loan loss provisions supported the recovery. Cumulative net profit, which had fallen from a year earlier through the first half, also turned to growth. A fall in net interest margin and a rise in the delinquency rate, however, remained a burden for future profitability and soundness management.

Hana Financial Group's year-to-date net profit for the third quarter was 3.62 trillion won, up 5.6 percent from a year earlier. It was driven by increased fee income in asset management and investment banking. It maintained quarterly net profit in the 1.2 trillion won range and decided to expand annual share buybacks and cancellations to 949.0 billion won, a record high.

In major financial groups' results, attention is on how much banks' expansion of corporate loans and profit and loss improvements from exchange-rate swings can offset slower earnings at securities units. The market is also watching whether they can post a record high annual net profit.

• Woori Financial posts 2.66 trillion won in year-to-date Q3 net profit, down 4.93 percent on-year • Woori Bank rebounds after weak first half, posts record-high Q3 net profit • Hana Financial posts 3.62 trillion won in year-to-date Q3 net profit, up 5.6 percent on-year • Will they set another net profit record? Four major financial groups in focus as brokerage earnings slow

Brokerages that posted strong results in the first half are expected to see a slowdown in the third quarter. Brokerage income fell as trading value in the domestic stock market declined, while rising market rates and stock-price volatility added to the burden of valuation losses in trading.

Hana Securities' third-quarter net profit was 10.0 billion won, down 83.88 percent from a year earlier. It also fell sharply from the previous quarter. Cumulative results for January to September improved from a year earlier, but most profit was concentrated in the first half.

Woori Investment & Securities' year-to-date net profit for the third quarter was 28.0 billion won, up 27.3 percent from a year earlier. Cumulative net operating revenue also increased over the same period.

• Dark clouds over brokerages' Q3 results as trading value falls and rates rise • Hana Securities posts 10.0 billion won Q3 net profit, down 83.88 percent on-year • Woori Investment & Securities posts 28.0 billion won year-to-date Q3 net profit, up 27.3 percent on-year

Competition among banks over retirement pension assets under management and investment returns also continued.

Hana Bank's retirement pension reserves exceeded 52 trillion won as of the end of the third quarter. They rose 377.41 billion won from the end of last year, the largest increase among banks. Growth in individual retirement pensions and defined contribution reserves drove the overall expansion.

Woori Bank posted an 18.4 percent return in the third quarter on principal non-guaranteed defined contribution products. That was the top result among the top 10 retirement pension providers across banking, securities and insurance by reserves. Its individual retirement pension return was 18.3 percent, ranking third among the same comparison group.

• Hana Bank's retirement pension reserves top 52 trillion won, largest increase among banks this year • Woori Bank posts 18.4 percent Q3 return on DC retirement pensions, ranks first among top 10 by reserves

The Bank of Korea held its policy rate at 3.00 percent. The decision took into account uncertainty over the Middle East situation and the monetary policies of major countries. It plans to decide whether to raise rates further after reviewing the impact of two earlier rate increases.

Despite the rate hold, upward pressure on banks' lending rates is expected to persist for the time being. Earlier rate hikes are being reflected in funding costs, and the possibility of additional increases remains. There is also a view that increases in banks' deposit and savings rates could lead to a rise in the Cost of Funds Index.

Pressure on loan soundness also increased. The delinquency rate for won-denominated loans at domestic banks stood at 0.69 percent at the end of August, rising for a second straight month. The delinquency rate for small and medium-sized enterprise loans was 1.00 percent, and for small and medium-sized corporations it was 1.10 percent. Financial authorities see room for further increases in delinquency rates in vulnerable sectors such as SMEs and self-employed borrowers, even though the overall delinquency rate is below the long-term historical average.

• BOK holds policy rate at 3.00 percent, checks external uncertainty before any further hike • Policy-rate hike takes a breather: where do bank deposit and lending rates go? • Domestic banks' loan delinquency rate rises for second month, small and medium-sized corporations at 1.10 percent

Financial firms also expanded support to ease financial cost burdens for small businesses and vulnerable groups.

Woori Financial supplied 34.7 trillion won in productive and inclusive finance over a year through its "Future Shared Growth Project" launched in September last year. It expanded funding for small businesses and regions and increased support for vulnerable groups, including retail finance and write-offs of long-overdue debts.

IBK Industrial Bank of Korea set up a total of 1.50 trillion won in loan support programmes for small merchants and SMEs. For companies that could face a higher interest burden as policy funding support ends, it will support converting existing loans. For companies guaranteed by local credit guarantee foundations, it will supply operating and facility funds.

Hana Bank, together with the Korea Credit Guarantee Fund, will support guarantees totalling 20.0 billion won for social economy firms such as social enterprises and cooperatives. It also plans to support part of the guarantee fees paid by companies for three years to lower financing costs.

The Youth Future Savings product drew 688,000 applications in its second recruitment round. Total applicants, excluding duplicates, stood at 2,819,000 including the first round. The 25 to 29 age group accounted for the highest share by age, and general income earners accounted for the largest share by subscription type. The Financial Services Commission began reviewing applicants' eligibility.

• Woori Financial supplies 34.7 trillion won in productive and inclusive finance over a year, expands share for SMEs and regions • IBK Industrial Bank of Korea provides 1.50 trillion won in financial support for small merchants and SMEs • Hana Bank and Korea Credit Guarantee Fund support 20.0 billion won in guarantees for social economy firms • FSC closes second round for Youth Future Savings, begins eligibility review for 688,000 applicants

Moves to attract customers through short-term fund management and partnered financial products also continued.

Kiwoom Securities' retail clients' balance of promissory notes it issued increased 5.5 times in nine months. Growth was particularly strong among people in their 20s and 30s, showing demand for short-term cash management expanding to younger investors.

Naver Pay extended its special maximum annual interest rate benefit of 4 percent on a demand deposit product it partnered with Woori Bank. It also launched a dedicated debit card jointly with Woori Card, offering up to 1.3 percent in points on payments.

• Kiwoom Securities' promissory note balance rises 5.5 times in nine months, investment also expands among people in their 20s and 30s • Naver Pay extends maximum 4 percent benefit on Woori Bank account, launches dedicated debit card

In the domestic stock market, expanded volatility cut net assets in exchange-traded funds and sidelined cash for stocks.

Net assets in the ETF market fell by about 36 trillion won in a month. Investor deposits fell below 90 trillion won to the lowest level in nine months, and margin loan balances also extended their decline.

The Korea Value-Up Index also fell nearly 40 percent from its peak. As the market adjusts, whether companies' shareholder return policies translate into real improvements in shareholder value has emerged as a key item to check.

In listed-company results, improvement in the semiconductor sector was confirmed. IBK Industrial Bank of Korea analysed first-half results for 1,581 Kosdaq-listed companies and found overall operating profit rose 60.4 percent from a year earlier. The operating profit margin for the semiconductor and related equipment sector rose to 12.4 percent this year from 6.9 percent in the first half of last year.

• 36 trillion won wiped out in a month: asset managers' ETF net assets wobble • Investor deposits fall below 90 trillion won, lowest in nine months • Stock slump pulls sidelined cash too as deposits drop to 90 trillion won • Weak market puts 'value-up' to the test, key is effectiveness of shareholder returns • IBK Industrial Bank of Korea analyses 1,581 Kosdaq firms, semiconductor operating margin rises to 12.4 percent

Debate over listing rules and shareholder protection also continued. As delisting rules for so-called penny stocks whose share prices fall below certain criteria began to be applied in earnest, companies involved moved to take legal action.

Plans by SK Hynix's U.S. unit Solidigm to pursue a listing were addressed in the parliamentary audit as a duplicate listing issue. Lee Chan-jin (이찬진), head of the Financial Supervisory Service, said it could potentially violate duplicate listing rules. Financial Services Commission Chairman Lee Eok-won (이억원) also expressed the view that Solidigm's U.S. listing would be considered a duplicate listing.

Criticism also emerged that some funds in comprehensive investment management accounts introduced to expand productive finance were invested in overseas private credit. Financial authorities said they would continue to check related exposure and the status of risk management.

Kakao denied speculation over a potential block deal and rumours of selling major affiliates raised ahead of a planned corporate split. It also said it would prepare measures to reflect stock prices and shareholder value in executive compensation systems in response to concerns among small shareholders over share-price declines and damage to corporate value.

• 'Penny stock exit' accelerates as targeted companies move to legal action • Lee Chan-jin: SK Hynix Solidigm listing could violate duplicate listing rules • [Parliamentary audit 2026] Lee Eok-won: will keep checking overseas private credit, Solidigm U.S. listing is duplicate listing • Kakao: block deal and affiliate sale rumours are unfounded, moves to calm small shareholder concerns

At the parliamentary audit of the financial sector, issues including how lending rates are calculated, responses to hacking, management of IT systems and governance were broadly addressed.

Questions focused on delayed responses to hacking incidents, insufficient security investment and compensation for damages for heads of the five major banks who attended the audit. Lawmakers also raised suspicions that banks reduced preferential rates after regulations on add-on rates took effect, cutting consumer benefits. They also cited cases where banks failed to recognise IT errors for extended periods. Some bank heads were criticised for management capability after failing to properly explain how rates were adjusted.

Issues also included controversy over "shadow executives" tied to the practice of rehiring retired executives at financial holding firms as advisers and consultants, and claims of preferential treatment for former Financial Supervisory Service officials in the financial sector. The effectiveness of compensation for voice phishing 피해 and a shortage of long-term fixed-rate mortgage supply were also key issues.

At the parliamentary audit of the Bank of Korea, lawmakers addressed claims that hacking attempts exceeded 3,000, along with a shortage of information security staff and privacy protection issues in the digital currency system. Questions also continued on the possibility of leakage of interbank transaction information, additional policy rate hikes, and growth and inflation forecasts.

There were also claims that contraction at savings banks and mutual finance institutions is deepening as funds concentrate in banks. Calls were raised for improvements involving the legal basis and oversight procedures for total household loan management, payment inconvenience for foreign tourists, Apple Pay fees and limits on the use of domestic easy payment services.

The effectiveness of banks' digital transformation remained a challenge. With branches and staff shrinking, work that is difficult to resolve through non-face-to-face channels has been concentrated at remaining branches, leading to continued customer waiting and employee workload, according to on-the-ground criticism.

• [Parliamentary audit 2026] From delayed response to compensation, five major bank heads face 집중 criticism over hacking • [Parliamentary audit 2026] Banks face 집중 criticism over rates, hacking and IT errors, governance suspicions also raised • [Parliamentary audit 2026] 'Shadow executive' controversy at financial holding firms, criticism also over banks' rate and security vulnerabilities • [Parliamentary audit 2026] BOK security weaknesses in the spotlight, digital currency safety also an issue • [Parliamentary audit 2026] Calls continue for improving loan regulations and easy payments as bank concentration deepens • Even with banks' digital shift, customer waits and staff burden persist - why?

The fintech industry saw its first entry into the savings bank sector.

Pinda received approval to acquire a 60 percent stake in Daewon Savings Bank. It is the first time a domestic fintech company has acquired a savings bank. It plans to expand beyond loan product comparison and brokerage into directly designing and supplying financial products.

Park Yeon-hyeon (박연현), a former head of corporate products at Toss Bank, was appointed as the first chief executive of Pinda Savings Bank. Centering on Park, who participated from the early stages of Toss Bank's launch and was responsible for developing co-lending products and corporate finance, it will push a digital savings bank business using financial data and artificial intelligence.

• Pinda wins approval to acquire 60 percent of Daewon Savings Bank, fintech's first entry into savings banking • Pinda Savings Bank appoints former Toss Bank corporate products head Park Yeon-hyeon as first CEO

The use of AI is expanding to group-wide common systems, investment in technology firms, and customer consultations and information services.

BNK Financial Group selected Samsung SDS as the preferred bidder and is pushing to build a generative AI platform used jointly by all affiliates. It plans to reduce overlapping investment by affiliate and establish an integrated system to manage risks that may arise when applying AI to financial operations.

JB Financial invested 40.0 billion won in Upstage to secure about a 2 percent stake. It will expand a strategic business agreement signed in September into an equity investment and strengthen cooperation to apply AI across financial operations, including corporate credit screening and document processing.

NH NongHyup Bank will introduce an AI financial assistant in mobile banking in December to support asset management and jeonse loans. It plans to expand the service to in-branch face-to-face consultations in 2027.

Shinhan Bank introduced an open online content platform that provides financial information on deposits, loans, investments and pensions. It can be used without membership registration, and it plans to respond to an environment where information searches through generative AI increase.

Korea Investment & Securities will work with Samil PwC to expand its financial business into AI infrastructure, including graphics processing units and AI data centres.

Overseas, Citi hired an AI expert from Google and reorganised its companywide AI organisation. JPMorgan Chase is redesigning workflows across operations to increase the effectiveness of AI adoption. It is emphasising improvements in overall workflow, performance measurement and controls, not just the processing speed of individual tasks.

• BNK Financial pushes group-wide AI system, selects Samsung SDS as preferred bidder • JB Financial invests 40.0 billion won in Upstage, secures 2 percent stake • NH NongHyup Bank to introduce AI financial assistant in December to support asset management and jeonse loans • Shinhan Bank boosts response to generative AI search, launches open financial information platform • Korea Investment & Securities expands AI infrastructure finance, joins Samil PwC on GPU financing • Citi hires Google veteran AI expert, talent competition in banking accelerates • JPMorgan Chase redesigns work for AI expansion, focuses on measurement and controls over speed

In the payments market, policy improvements are being pushed to strengthen risk management and promote competition.

The Financial Services Commission is pushing steps to tighten real estate loan regulations for specialised credit finance companies such as card and capital firms, and to require card firms to regularly check payment risks at payment gateway operators. It plans to strengthen risk management for credit concentration related to real estate and for online payment gateway transactions, while easing limits on rental business handling by specialised credit finance companies.

The British government is pushing a plan to loosen Apple's control over iPhone contactless payment technology. It judged that, despite some functions being opened to outside developers, high fees and strict usage conditions make it difficult for competing Apple Pay services to emerge.

• FSC tightens specialised credit finance firms' real estate loan limits, mandates management of PG payment risks • Will Apple Pay's dominance be checked? Britain pushes further opening of iPhone payment functions

In overseas stock markets, investor sentiment toward tech shares and investment in high-risk products drew attention. Selling spread mainly among tech stocks amid concerns over Tesla's outlook, and Chinese stocks also entered a bear market.

Analysis said it is too early to rush into AI data centre-related shares despite a rebound in U.S. tech stocks. As South Korean investors continue high-risk leveraged investing in the U.S. market, the risk of losses from rising volatility also emerged as a point of focus.

In the United States, an implementation method was presented for a plan to gift SpaceX shares. U.S. President Donald Trump said a plan in which Elon Musk, Tesla's CEO, said he would give 1 SpaceX share each to all children in the United States would be carried out through a children's investment account called the "Trump account". The shares presented as the gift amount to 72 million shares.

• Tech shares stumble on Tesla outlook, Chinese stocks also enter bear market • "Don't jump in just because AI shares rebound, not yet" - four preconditions before buying • Betting on a shaky Korean market: are Korean retail investors' leveraged all-in bets OK? • How will 72 million SpaceX shares be distributed? Paid through 'Trump account'