Business · Markets · 3 hrs ago
South Korean bank stocks fall 14.57% in October
South Korean bank stocks fell sharply in October, with the KRX Banking Index down 14.57% through the previous day.
Shares in major lenders including Shinhan, Woori, Hana Financial and KB Financial also declined.
Banks’ net interest margins, a measure of profitability, fell in the third quarter as low-cost deposits shrank and funding costs rose.
The weaker margins stirred doubts about whether higher interest rates would help banks, while concerns about rules on loan interest rates also weighed on shares.
The drop in US 10-year Treasury yields below 5% also reduced the appeal of bank stocks as a defensive investment.
Analysts expect margins to begin recovering from the fourth quarter as higher market rates feed into loan rates, potentially supporting earnings into next year.
South Korea’s KRX Bank Index fell 14.57% from the start of October through the previous day, according to the Korea Exchange.
Shinhan Financial Group shares fell 19.42%, while Woori Financial Group, Hana Financial Group and KB Financial Group also declined.
Analysts attributed the weakness partly to falling net interest margins and rising funding costs reported by banks for the third quarter.
Other concerns included weaker demand for bank shares as US Treasury yields eased and worries about financial regulators’ possible controls on loan-rate margins.
Analysts said margins and earnings could improve from the fourth quarter as higher market rates are reflected in loan rates.
- Who
- South Korean bank stocks, including Shinhan, Woori, Hana and KB Financial Group.
- What
- The KRX Bank Index fell 14.57% in October through the previous day.
- When
- From the start of October through the day before the article’s October 26 publication.
- Where
- South Korea.
- Why
- Analysts cited lower third-quarter net interest margins, higher funding costs, weaker appeal as a high-rate hedge and concerns about regulation of loan-rate margins.
Analysts warning of near-term weakness
Analysts expecting a recovery from the fourth quarter
Near-term outlook
Analysts warning of near-term weakness
Falling net interest margins and higher funding costs have weakened bank earnings momentum, and bank stocks may remain out of favour.
Analysts expecting a recovery from the fourth quarter
Higher market rates should feed into loan rates, allowing net interest margins and earnings to improve from the fourth quarter.
Hana Financial Group reported a net interest margin of 1.83%, down 0.05 percentage points from the previous quarter, and Woori Financial Group reported 1.68%, down 0.07 points.
The KRX Bank Index fell 14.57%, according to the Korea Exchange.
Hankyung published its report on the declines in South Korean bank stocks.
Analysts expect higher market rates to be reflected in loan rates and net interest margins to begin recovering.
- KRX Bank Index
- Down 14.57% in October through the previous day
- Shinhan Financial Group
- Shares fell 19.42%
- Woori Financial Group
- Third-quarter net interest margin was 1.68%, down 0.07 percentage points
- Hana Financial Group
- Third-quarter net interest margin was 1.83%, down 0.05 percentage points
- KB Financial Group
- Shares fell 12.8%
- Hankyung publication
- October 26, 2026
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