NongHyup Financial Group Reports H1 Net Profit of 910.2 Billion KRW, Down 8.7% Year-on-Year

Q2 Net Profit of 571.6 Billion KRW, Up 232.9 Billion KRW from Previous Quarter
Net Profit Before Agricultural Support Expenses at 1.0599 Trillion KRW
Proactive Provisioning of 123.8 Billion KRW to Enhance Future Loss Absorption Capacity

[Asia Economy Reporter Kangwook Cho] NongHyup Financial Group announced on the 28th that its cumulative net income for the first half of this year was 910.2 billion KRW, down 8.7% (86.9 billion KRW) from the same period last year (997.1 billion KRW). This decline is attributed to the reflection of provisions to enhance future loss absorption capacity.

However, excluding the 214.1 billion KRW agricultural support project expenses provided under the Agricultural Cooperative Act to support agriculture and rural areas, NongHyup Financial Group’s net income amounts to 1.059 trillion KRW.

The net income for the second quarter was 571.6 billion KRW, a 68.8% increase compared to the previous quarter (338.7 billion KRW). This was thanks to the recovery of securities, foreign exchange, and derivatives gains following financial market stabilization.

Interest income for the first half reached 3.9201 trillion KRW, and fee income recorded 765.8 billion KRW.

The provision for credit losses was 322.8 billion KRW, a 72.7% increase from 186.9 billion KRW in the same period last year. This was influenced by the proactive additional allocation of 123.8 billion KRW in loan loss provisions to enhance future loss absorption capacity due to COVID-19.

Asset soundness indicators showed a non-performing loan ratio of 0.49% and a loan loss provision coverage ratio of 130.86%, maintaining a favorable trend.

Total assets increased by 10.9% (46.7 trillion KRW) from the end of last year to 473.8 trillion KRW. Profitability indicators recorded ROE of 8.40% and ROA of 0.40% (before agricultural support project expenses, ROE was 9.78% and ROA was 0.47%).

The core subsidiary, NongHyup Bank, posted a net income of 726.8 billion KRW for the first half, down 14.1% (118.8 billion KRW) from the same period last year. Interest income increased by 2.0% (52.9 billion KRW) year-on-year, but the provision for credit losses increased by 76.8% (104.0 billion KRW) due to additional loan loss provisions following adjustments in future economic outlooks.

Among non-bank affiliates, NH Investment & Securities recorded a net income of 261.7 billion KRW. Other affiliates also achieved net incomes of 40.4 billion KRW in life insurance, 41.9 billion KRW in non-life insurance, 28.5 billion KRW in capital, 11.5 billion KRW in asset management, and 10.7 billion KRW in savings banks.

NongHyup Financial Group set its strategic direction for the second half as "Strengthening internal management focused on preparing for the future" in response to the management environment of the "With COVID-19 era." It plans to focus on key tasks such as strengthening risk management of potentially impaired assets and continuously implementing management structure improvement projects. Additionally, it announced plans to accelerate digital transformation, incorporate future response tasks such as the MyData business and new business discovery into its mid-term management strategy, and promote these initiatives company-wide.

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