SC First Bank Q3 Earnings 182.9 Billion KRW... 28.1% Decrease YoY

[Asia Economy Reporter Minyoung Kim] SC First Bank announced on the 16th that it recorded a net income of 182.9 billion KRW on a consolidated basis for the first three quarters of 2020. This represents a decrease of 71.6 billion KRW (28.1%) compared to the same period last year (254.5 billion KRW).

SC First Bank explained that "this was due to an increase in provision expenses caused by the overall economic downturn resulting from the impact of the novel coronavirus disease (COVID-19)."

According to the bank, interest income slightly increased compared to the same period last year due to steady expansion of loan assets and deposits of low-cost funds through strengthening the business base, despite a decline in net interest margin (NIM) caused by market conditions deterioration such as two cuts in the Bank of Korea’s base interest rate. Non-interest income decreased compared to the same period last year due to the base effect of one-time gains from non-performing loan sales and investment securities valuation gains that occurred last year, although the asset management (WM) and foreign exchange trading divisions showed favorable performance.

Regarding expenses, despite the usual increase in labor costs, thorough cost management and special retirement programs led to a slight decrease compared to the same period last year.

The return on assets (ROA) and return on equity (ROE) fell to 0.31% and 5.34%, down 0.19 percentage points and 2.13 percentage points respectively from the same period last year.

Provision expenses for loan losses nearly doubled compared to the same period last year due to conservative risk management measures in response to the COVID-19 impact. On the other hand, through rigorous risk management, the bank explained that asset quality has continuously improved as the non-performing loan ratio and delinquency ratio improved by 0.18 percentage points and 0.12 percentage points respectively from the same period last year, recording 0.34% and 0.15%.

Total assets reached 82.623 trillion KRW, an increase of 9.8914 trillion KRW (13.6%) from September last year (72.7316 trillion KRW). The company stated that this was due to balanced growth in real estate project financing (PF) loans, household loans, and financial market-related transactions in the corporate finance sector.

As of the end of last September, the Bank for International Settlements (BIS) capital adequacy ratio and Tier 1 capital ratio stood at 15.53% and 13.68% respectively, continuously exceeding regulatory requirements and maintaining sound capital soundness.

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