Korean banks see Q4 net incomes halved on costs and FX losses

Loan growth will remain challenging in FY2026, CreditSights said.

Korean banks’ net incomes were halved in Q4 2025 compared to the previous quarter, although FY2025 net incomes still rose overall.

The four banks— Kookmin Bank (KB), Shinhan Bank, KEB Hana Bank, and Woori Bank— saw net incomes fall 50% to 79% quarter-on-quarter (QoQ) in Q4 on lower disposition and valuation income, higher credit costs, and penalty provisions, reported CreditSights on 9 February 2026.

The banks’ net incomes for FY2025 rose 2% to 15% year-on-year (YoY) mainly driven by higher non-interest income and supported by strong equity markets.

Net interest income rose modestly in Q4 2025 and reported double-digit growths for the whole year.

“[The] rebound in equity markets since April 2025 boosted investment gains and commissions from [investment banking], brokerage, and fund businesses,” CreditSights wrote.

Non-interest income weakened in Q4, however, due to foreign exchange (FX) losses from a weaker Korean won (KRW) and lower disposition and valuation income amidst higher market rates, it added.

Loan growth in KRW was between 4% to 5% YoY in FY2025, muted at Woori, CreditSights said.

“Most banks fell short of their FY2025 targets due to tighter mortgage regulation and soft corporate demand,” it said.

Looking into 2026, margins are likely to remain largely stable with the Bank of Korea holding rates steady, Credit Sights said.

Loan growth will remain challenging, however, amidst mortgage regulation and increased competition in corporate lending.

“Other non-interest income will depend on the sustainability of equity market performance, and credit costs to remain stable or improve slightly,” it said.