'Non-Interest Income Surge' SC Jeil Bank Reports H1 Net Profit of 182 Billion KRW, Up 21.1% YoY

Non-Interest Income Grows 25.7% Year-on-Year
Interest Income Shows Flat Performance at 473.5 Billion KRW

[Asia Economy Reporter Kim Min-young] SC First Bank announced on the 14th through its earnings report that it achieved a consolidated net profit of 182 billion KRW in the first half of this year. This represents an increase of 31.7 billion KRW (21.1%) compared to the same period last year (150.3 billion KRW). The bank posted excellent results despite the spread of the novel coronavirus infection (COVID-19).

Non-interest income performed well

Non-interest income showed strong growth. In the first half of this year alone, the bank earned 210.4 billion KRW from non-interest income, up 25.7% from 167.4 billion KRW in the same period last year. The bank explained that this increase was due to favorable asset management (WM) fee income and corporate finance foreign exchange trading income amid increased financial market volatility compared to the previous year.

Interest income remained at a similar level to previous years. The bank earned 473.5 billion KRW in the first half of this year, a 0.17% increase from 472.7 billion KRW in the same period last year. Despite steady strengthening of the business base and expansion of loan assets, net interest margin (NIM) declined due to worsening market conditions caused by the COVID-19 pandemic and two cuts in the Bank of Korea’s base interest rate.

Both asset quality and profitability improved. Return on assets (ROA) and return on equity (ROE) rose by 0.03 percentage points and 1.37 percentage points, respectively, reaching 0.48% and 8.02%, higher than the same period last year.

The ratio of non-performing loans and delinquency rate fell by 0.22 percentage points and 0.11 percentage points, respectively, to 0.34% and 0.15% compared to the same period last year. The bank stated, “Thanks to thorough risk management, the soundness of the asset portfolio continues to improve.”

Thorough preparation against COVID-19 shocks

The bank also accumulated a significant amount of loan loss provisions to prepare for financial market deterioration caused by COVID-19. The loan loss provision coverage ratio for the first half was 187.72%, an increase of 28.72 percentage points compared to the same period last year. The amount of loan loss provisions increased by 74% to 43.4 billion KRW from 24.9 billion KRW in the same period last year.

Assets also grew significantly. Total assets reached 81.5406 trillion KRW, an increase of 12.6019 trillion KRW (18.3%) from 68.9387 trillion KRW in the same period last year. This was due to increases in loan assets, investment assets, and derivative assets.

As of the end of June, the Bank for International Settlements (BIS) capital adequacy ratio and Tier 1 capital ratio stood at 15.19% and 13.37%, respectively, continuously exceeding the financial supervisory authorities’ requirements and maintaining solid capital soundness.

Jongbok Park, CEO of SC First Bank / Photo by Honam Moon munonam@

Park Jong-bok, President of SC First Bank, said, “Rather than placing significance on short-term performance improvements in specific sectors caused by changes in market conditions, strengthening the bank’s overall business capabilities and securing a long-term profit base are important tasks. Since the business environment is expected to become more challenging and uncertain in the second half of the year, we plan to enhance resilience against risks and find ways to maximize our strengths.”

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