DGB Financial's First Half Net Profit 185.1 Billion KRW... 8.2% Decrease YoY

Kim Tae-oh, Chairman of DGB Financial Group

[Asia Economy Reporter Minyoung Kim] DGB Financial Group announced on the 30th that it achieved a net income attributable to controlling shareholders of 185.1 billion KRW in the first half of this year. This represents a decrease of approximately 8.2% compared to the same period last year. The sharp decline in the regional economy due to the impact of the novel coronavirus disease (COVID-19) that swept through in the first half was a major factor.

DGB Financial explained, "The result reflects the impact of proactively setting aside loan loss provisions in the second quarter of this year in preparation for the prolonged COVID-19 pandemic," adding, "excluding these factors, the performance was similar to that of the same period last year."

The core affiliate, Daegu Bank, showed significant weakness. Daegu Bank’s net profit recorded 138.7 billion KRW, down 22.1% (178.2 billion KRW) compared to the same period last year. DGB Financial analyzed, "The main reasons were the reduction in interest income due to the sharp decline in market interest rates since the second half of last year and the proactive setting aside of loan loss provisions reflecting a conservative outlook on the future economy."

Non-bank affiliates posted strong results. Hi Investment & Securities earned 48.1 billion KRW in the first half, growing 57.0% compared to the same period last year. DGB Life Insurance and DGB Capital recorded profits of 22.5 billion KRW (48.0%) and 18.0 billion KRW (22.4%), respectively. The contribution of non-bank affiliates to profits is expected to expand further going forward.

Soundness indicators deteriorated slightly. The Basel III Common Equity Tier 1 (CET1) ratio fell by 0.68 percentage points from 12.81% in the first half of last year to 12.13%, and the common equity tier 1 capital ratio dropped by 0.71 percentage points from 9.91% to 9.20%.

Profitability also declined. Return on assets (ROA) and return on equity (ROE) recorded 0.49% and 7.80%, respectively, down from the same period last year.

A DGB Financial Group official stated, "In the second half, we plan to focus more on capital adequacy and soundness management while fulfilling our social roles and responsibilities as a financial group."

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