Mutual Financial Cooperatives Report 2.17 Trillion KRW Net Profit Last Year... 390 Billion KRW Decrease from Previous Year

[Asia Economy Reporter Kim Hyo-jin] The Financial Supervisory Service announced on the 31st that the net income of a total of 2,228 mutual financial cooperatives, including credit unions, Nonghyup, Suhyup, and the Korea Forest Cooperative, amounted to 2.1702 trillion KRW last year, a decrease of 389.6 billion KRW (15.2%) compared to 2018 (2.5598 trillion KRW).

The net profit in the credit business sector (finance) decreased by 62.3 billion KRW due to increased selling and administrative expenses, while losses in the economic business sector increased by 327.3 billion KRW due to falling prices and sluggish sales of agricultural and marine products.

At the end of last year, the delinquency rate of mutual financial cooperatives was 1.71%, up 0.39 percentage points from 1.32% at the end of the previous year.

The delinquency rate for household loans rose by 0.18 percentage points to 1.42% compared to 1.24% at the end of the previous year, and the delinquency rate for individual business loans increased by 0.78 percentage points to 2.12% from 1.34% at the end of the previous year.

The ratio of non-performing loans classified as fixed or below rose by 0.52 percentage points to 2.04% compared to 1.52% at the end of the previous year.

The total assets of mutual financial cooperatives at the end of last year were 546.1 trillion KRW, an increase of 40.2 trillion KRW (7.9%) compared to 505.9 trillion KRW at the end of the previous year.

The net capital ratio was 8.10%, up 0.01 percentage points from 8.09% at the end of the previous year, maintaining a high level compared to the regulatory ratio (2%).

A Financial Supervisory Service official said, "The loss absorption capacity of mutual financial cooperatives has remained at a sound level."

However, the official added, "There is a possibility that latent risks may materialize, especially among vulnerable borrowers such as small business owners due to COVID-19. We plan to monitor the soundness status more closely by borrower and industry delinquency rates, actively guide the enhancement of loss absorption capacity and the disposal of non-performing assets, and promote inclusive finance to alleviate financial burdens through debt adjustment systems."

Provided by the Financial Supervisory Service

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