BNK Financial Group Reports 562.2 Billion KRW Net Profit Last Year... Non-Banking Sector Advances

Core affiliates Busan Bank and Gyeongnam Bank report net profits of 374.8 billion KRW and 181.7 billion KRW respectively
Capital 78.9 billion KRW, Investment Securities 21.0 billion KRW, Savings Bank 20.0 billion KRW in net profit

Kim Ji-wan, Chairman of BNK Financial Group

[Asia Economy Reporter Kim Min-young] BNK Financial Group announced on the 6th through its earnings report that it achieved an annual net profit attributable to controlling interests of 562.2 billion KRW last year. This represents an increase of 60.1 billion KRW (12.0%) compared to the previous year.

According to BNK Financial, despite a decrease in interest income, solid results were delivered due to improved non-interest income, performance of non-bank affiliates, and increased non-interest gains.

By segment, interest income decreased by 156.7 billion KRW (6.7%) year-on-year due to a decline in the net interest margin (NIM) of the banking division. Non-interest income increased by 152.1 billion KRW (87.8%) year-on-year due to improved performance in the non-bank division.

Asset quality continued to improve. Loan portfolio enhancement and proactive risk management led to a decrease in the provision for loan losses by 70.2 billion KRW (14.0%) compared to the previous year. Selling and administrative expenses increased by only 8.6 billion KRW (0.7%) year-on-year due to cost management efforts.

The core affiliates, Busan Bank and Gyeongnam Bank, posted net profits of 374.8 billion KRW (up 8.10% year-on-year) and 181.7 billion KRW (up 7.54% year-on-year), respectively, maintaining solid performance. The non-bank division, including BNK Capital with 78.9 billion KRW, BNK Investment & Securities with 21.0 billion KRW, and BNK Savings Bank with 20.0 billion KRW, also recorded a combined increase of 25.0% or 25.0 billion KRW compared to the previous year.

Profitability also improved. The return on assets (ROA), a profitability indicator, was 0.58%, and the return on equity (ROE) was 7.04%, rising by 0.03 percentage points and 0.29 percentage points, respectively, compared to the previous year. The cost-to-income ratio (CIR) was recorded at 50.69%, maintaining a sound profit structure.

Capital adequacy indicators, the Basel Committee on Banking Supervision (BIS) total capital ratio and common equity tier 1 ratio, declined by 0.20 percentage points and 0.01 percentage points year-on-year to 12.95% and 9.54%, respectively, due to changes in the calculation method for the capital recognition amount of contingent capital securities and increased dividends aimed at enhancing shareholder value.

At the board meeting held that day, a cash dividend of 360 KRW per share was approved. This is an increase of 60 KRW (20%) compared to the 300 KRW cash dividend in 2018. The dividend payout ratio (total dividends to net profit) rose by 1.4 percentage points year-on-year to 20.9%.

Myung Hyung-guk, CFO of BNK Financial Group’s Strategic Finance Division, stated, “In 2020, we plan to continue the management strategy of improving asset quality and expanding non-bank and non-interest income while maintaining NIM stability to sustain profitability improvement. We will also strive to enhance shareholder value and stabilize stock prices through continuous annual increases in dividend payout ratios.”

This content was produced with the assistance of AI translation services.