NongHyup Financial Group's Net Profit of 1.7 Trillion Won Last Year... Established Among the Top 4 Financial Groups
437 Billion KRW Decrease Compared to Same Period Last Year
Impact of Proactive Allowance for Bad Debts Provisioning
[Asia Economy Reporter Kiho Sung] NH Nonghyup Financial Group recorded a net profit of 1.7359 trillion KRW in 2020. This is a decrease of 43.7 billion KRW compared to 1.7796 trillion KRW in the same period last year. However, it surpassed Woori Financial Group, which posted a net profit of 1.3073 trillion KRW during the same period, securing the 4th place among financial holding companies.
Nonghyup Financial announced last year's results on the 16th. Regarding the decline in performance, Nonghyup Financial explained, "It is the result of proactively setting aside loan loss provisions to enhance future loss absorption capacity and minimize uncertainties related to potential credit risks in investment assets."
The group's core profit, interest income, recorded 7.9868 trillion KRW. The net interest margin (NIM) narrowed by 0.7 percentage points to 1.65% compared to the previous year, but interest income increased by 2.0% (156.4 billion KRW) year-on-year due to loan growth and an increase in low-cost deposits.
Fee income rose 39.7% year-on-year to 1.6265 trillion KRW, supported by the expansion of non-face-to-face transactions and net growth in securities brokerage commissions.
Asset soundness indicators maintained a favorable trend, with a non-performing loan ratio of 0.48% and a loan loss provision coverage ratio of 140.39%.
Total assets increased by 13.2% (56.4 trillion KRW) from the end of the previous year to 483.5 trillion KRW, and profitability indicators recorded ROE of 7.87% and ROA of 0.44% (before agricultural support expenses, ROE 9.22%, ROA 0.51%).
Investment Securities Achieved Net Profit of 570 Billion KRW, Life and Non-life Insurance Also Showed Improved Results
The core subsidiary, Nonghyup Bank, posted a net profit of 1.3707 trillion KRW, down 9.6% (146.4 billion KRW) year-on-year. Interest income increased by 4.4% (226.7 billion KRW) year-on-year, but credit loss provisions increased by 205.7 billion KRW due to proactive additional provisioning to enhance future loss absorption capacity.
Among non-bank affiliates, Investment Securities recorded a net profit of 577 billion KRW, and Life Insurance and Non-life Insurance also showed improved results with 61.2 billion KRW and 46.3 billion KRW, respectively.
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Meanwhile, Nonghyup Financial has set "Accelerating Design Management Based on Innovation and Internal Stability" as its strategic direction for 2021, focusing on accelerating digital transformation, strengthening Environmental, Social, and Governance (ESG) management, and enhancing its role in agricultural finance. It also stated that it will establish customer-centered trust management through proactive risk management and strengthening financial consumer protection.
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