BNK Financial Group Faces Continued Earnings Decline... H1 Net Profit Stands at 310.9 Billion KRW

COVID-19, Local Economic Downturn Lead to Continued Poor Performance
H1 Net Profit Down 11.5% Year-on-Year
Core Affiliates Busan Bank (-20%), Gyeongnam Bank (-13%) Underperform
Non-Banking Sector Shows Improvement... PF Fee Increase

Jiwan Kim, Chairman of BNK Financial Group

[Asia Economy Reporter Kim Min-young] BNK Financial Group announced on the 27th through its earnings report that it achieved a net income attributable to controlling shareholders of 310.9 billion KRW for the first half of this year. This represents an 11.5% decrease compared to the same period last year (351.2 billion KRW). The poor performance of its core affiliates, Busan Bank and Gyeongnam Bank, was the decisive factor.

BNK Financial explained, "Despite a decline in interest income, project financing (PF) fees from affiliates, including 40 billion KRW from LCT, increased to 196.6 billion KRW."

It added that the decline in earnings was due to conservative additional provisions related to COVID-19 and voluntary retirement costs at Busan Bank amounting to 18.2 billion KRW.

In the second quarter of this year, the provision expenses included 25.5 billion KRW related to COVID-19 and 11.6 billion KRW related to Lime Asset Management funds.

The group's net interest margin (NIM) was 1.86%, down 0.03 percentage points from the previous quarter.

Asset quality was maintained. The group's delinquency ratio was 0.77%, down 0.07 percentage points from the previous quarter.

The performance of the core banking affiliates also slipped. Both Busan Bank and Gyeongnam Bank saw significant declines in net income. Busan Bank earned 178.1 billion KRW, a 20.0% decrease from 222.7 billion KRW in the same period last year. Gyeongnam Bank posted net income of 104.6 billion KRW, down 13.1% from 120.4 billion KRW last year.

NIM improvement was sluggish as well. Busan Bank's NIM was 1.88%, down 0.06 percentage points from the previous quarter, while Gyeongnam Bank's NIM rose by only 0.01 percentage points to 1.83%. Delinquency ratios were 0.68% for Busan Bank and 0.67% for Gyeongnam Bank.

Net income from non-bank affiliates showed mixed results. Major affiliates BNK Capital and BNK Investment & Securities recorded net incomes of 44.8 billion KRW and 22.5 billion KRW, respectively, up 14.0% and 77.2% year-on-year due to increased corporate banking (IB) fees and stock and bond brokerage commissions. BNK Savings Bank and BNK Asset Management posted net incomes of 9.1 billion KRW and 0.2 billion KRW, respectively. BNK Asset Management notably returned to profitability from a loss in the previous quarter.

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