Kim Haengchun, Vice President of NongHyup Bank, "Preparing for the Zero Interest Rate Era Since Last Year... Exceeded Targets"

-First half bond trading profits increased about 15 times compared to last year
-Exceeded targets through active fund management
-Will continue active management in second half to maximize returns
-Portfolio diversification planned including expansion of overseas securities and credit bonds

Haengchun Kim, Head of Fund Management Division (Vice President), NH Nonghyup Bank

[Asia Economy Reporter Park Sun-mi] "Among the five major banks, we pride ourselves on the most proactive fund management to maximize profits. We have already exceeded this year's profit targets."

NH Nonghyup Bank achieved both maximizing profits through active bond trading and expanding its corporate finance customer base in the first half of this year. In a crisis where banks' profit bases are weakening in the zero interest rate era, the synergy between Kim Haeng-chun, Vice President of the Fund Management Division's strategy to increase non-interest income, and Son Byung-hwan, President's determination to continuously focus on expanding the customer base as a latecomer in the corporate finance sector, is being highly evaluated.

In an interview with Asia Economy on the 6th, Vice President Kim explained the secret to exceeding the profit target in the fund management division despite increased financial market volatility due to the COVID-19 aftermath: "The fund management strategy prepared since last year to cope with the zero interest rate era was effective." He added, "In the process of building a portfolio focused on safe assets to prepare for uncertainty, not only the volume of bonds but also the extension of duration influenced the maximization of profitability."

Before the full-scale interest rate decline in the first quarter, the bank proactively increased the bond management scale by 8.8 trillion KRW and extended the duration by 0.30 years to establish a profit base. The proactive increase in volume and duration resulted in securing over 100 billion KRW in profits compared to the existing portfolio. During the subsequent interest rate decline period, active bond trading was conducted. Vice President Kim stated, "By repeatedly conducting active buying and selling utilizing market interest rate fluctuations, we secured a total bond trading profit of 125.7 billion KRW in the first half of the year," adding, "This not only achieved the annual target but also increased nearly 15 times compared to the same period last year (8.6 billion KRW)."

Following the financial authorities' announcement of market stabilization measures due to the COVID-19 shock, Vice President Kim actively cooperated with policies in the fund management division to support NH Nonghyup Bank in broadening its customer base. While generating profits is important for the bank, President Son also supported the judgment that helping companies during national difficulties can expand the customer base.

The bank participated from the first round in the liquidity support system through repurchase agreements (RP) with full supply and actively took part in the Bank of Korea's foreign currency loan bidding and support for small business owners. Vice President Kim said, "By actively cooperating with financial authorities' policies and fulfilling the public role as a cooperative bank while timely managing assets with high returns compared to funding costs, we were able to enhance profits. Although the workload was heavy due to the significant increase in government policy fund support for SMEs, small business owners, and self-employed due to COVID-19, employees carried out their duties with a sense of responsibility."

Vice President Kim's challenge for the second half of the year, after successful fund management results in the first half, is how to respond to the continuous interest rate decline trend accelerated by COVID-19. He said, "We will engage in more aggressive management with higher risks to maximize returns," adding, "In the second half, we plan to improve profitability through portfolio diversification such as expanding overseas securities and credit bonds, and gradually increase the proportion of emerging markets in overseas securities investments, which have so far focused on developed countries."

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