Korea’s top finance firms -- KB, Shinhan, Hana, Woori and NongHhyup -- have set aside a total of nearly 1.7 trillion won ($1.2 billion) in reserve for the compensation of losses related to the misselling of equity-linked securities products tracking the Hang Seng China Enterprises Index in Hong Kong.

While KB Financial Group, the top seller of the ELS products, set aside 862 billion won to cover the compensation, NongHyup and Shinhan each allocated 341.6 billion won and 274 billion won. Hana and Woori put aside 179.9 billion won and 7.5 billion won, regulatory filings showed Friday.

With the increased costs to cover the compensation, the five firms’ net profit in the first quarter dipped from a year earlier.

Shinhan Financial Group was ranked top in terms of net profit, recording 1.32 trillion won ($970 million) in the first quarter, down 4.8 percent on-year. KB came in second with 1.04 trillion won, down 30.5 percent, followed by Hana at 1.03 trillion won, down 6.2 percent. Woori and NongHyup each saw 824.5 billion won and 651.2 billion won in net profit, marking a 9.8 percent and 31.2 percent decrease on-year.

“Despite the stable increase in core profits and the decrease in the allowance for bad debt, the non-operating expenses increased sharply as we set aside 862 billion won for compensations of losses from the sales of the Hong Kong ELS,” an official from KB Financial Group said.

The banking industry, however, views there will not be further losses from the sales of the HSCEI-tied ELS.

“Though the compensation expenses for the ELS products were recognized as a liability, pulling the net profit down, this is a one-time expense which will not further affect the statement of accounts,” an official from Shinhan Financial Group said.

Woori Financial Group, which was the least affected by the ELS mishap as it sold the smallest amount, also said it has set aside all of the compensation costs in the first quarter, and there will not be further expenses.

Local banks sold a total of 18.8 trillion won worth of high-risk ELS products tied to the HSCEI. With snowballing losses expected to reach almost 6 trillion won this year, the local regulator Financial Supervisory Service advised banks to partly make up for the investment losses by issuing guidelines on compensation. Major banks accepted the guidelines and eventually began the compensation process.