DGB Financial Reports 15% Earnings Drop Due to COVID-19... Achieves 88.2 Billion KRW Net Profit in Q1

[Asia Economy Reporter Kim Min-young] DGB Financial Group announced on the 7th that it recorded a net income attributable to controlling shareholders of 88.2 billion KRW for the first quarter of this year. This represents a decrease of about 15% compared to the same period last year. Despite the impact of the novel coronavirus disease (COVID-19) that severely hit the Daegu and Gyeongbuk regions, which are its local bases, the group is evaluated to have performed relatively well.

DGB Financial analyzed, "Considering the disappearance of about 10 billion KRW in one-time gains that occurred in the first quarter of last year and the rapidly declining market interest rates due to the COVID-19 situation, we achieved relatively favorable results." DGB Financial is a financial company based in Daegu and Gyeongbuk, which were directly hit by COVID-19. In particular, its core subsidiary, Daegu Bank, has both its 1st and 2nd headquarters located in Daegu, and 92% of its branches are concentrated in Daegu and Gyeongbuk.

Soundness indicators deteriorated somewhat. The Bank for International Settlements (BIS) capital adequacy ratio fell by 0.72 percentage points from 12.79% in the first quarter of last year to 12.07%, and the common equity tier 1 ratio decreased by 0.80 percentage points from 9.94% to 9.14%.

Profitability also declined. The return on assets (ROA) and return on equity (ROE) recorded 0.48% and 7.53%, respectively, slightly down from the same period last year.

Daegu Bank's net income recorded 78.7 billion KRW, down 10.4% compared to the same period last year. The main cause is interpreted as the decrease in interest income due to the decline in market interest rates.

On the other hand, despite this economic downturn, Daegu Bank's won-denominated loans increased by 5.0% compared to the previous quarter, and the soundness indicators, the ratio of non-performing loans and the delinquency rate, improved by 0.10 percentage points and 0.04 percentage points compared to the same period last year, recording 0.84% and 0.65%, respectively.

Non-bank affiliates posted stable results. Hi Investment & Securities, DGB Life Insurance, and DGB Capital achieved net incomes of 13.1 billion KRW, 9.2 billion KRW, and 7.6 billion KRW, respectively. DGB Financial stated that it expects the profit contribution of non-bank affiliates to expand further in the future.

A DGB Financial official said, "Due to the impact of COVID-19, uncertainty about domestic and international economies is increasing, so we plan to focus more on capital adequacy and soundness management."

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