Last Year, Mutual Savings Banks' Net Profit 2.2 Trillion Won... Only NongHyup Declined

Total Assets 584 Trillion, Up 7.0% from Previous Year

Financial Supervisory Service 2020 Mutual Savings Banks Business Performance (Provisional)

[Asia Economy Reporter Oh Hyung-gil] Last year, the net income of mutual financial cooperatives showed a slight increase compared to the previous year, indicating a solid performance. While credit unions and fisheries cooperatives showed growth, the Nonghyup saw a decrease in net income.

According to the 2020 provisional business performance report of mutual financial cooperatives released by the Financial Supervisory Service on the 7th, the net income of mutual financial cooperatives was 2.1767 trillion KRW, a 0.2% increase from the previous year.

Nonghyup recorded 1.6459 trillion KRW, a 2.7% decrease from the previous year, whereas credit unions (383.1 billion KRW), fisheries cooperatives (77.9 billion KRW), and forestry cooperatives (69.8 billion KRW) each showed an increase compared to the previous year.

Due to decreases in interest and non-interest income, the net income of the credit business division significantly declined to 3.4644 trillion KRW, while in the economic business division, the deficit narrowed due to increased sales at Nonghyup Hanaro Mart.

Total assets of mutual financial cooperatives grew by 7.0% from the previous year to 584 trillion KRW. Total loans amounted to 401 trillion KRW and total deposits to 498 trillion KRW, increasing by 9.8% and 7.3% respectively compared to the previous year.

Asset soundness showed improvement. The delinquency rate improved by 0.17 percentage points from the end of 2019 to 1.54%. The household loan delinquency rate improved by 0.23 percentage points, and the corporate loan delinquency rate improved by 0.24 percentage points. The ratio of non-performing loans also decreased by 0.02 percentage points from the previous year-end to 2.02%.

The net capital ratio, indicating capital adequacy, rose by 0.07 percentage points from the end of 2019 to 8.17%, maintaining a level higher than the regulatory ratio.

A financial authority official stated, "Due to the continuation of COVID-19 financial support policies, asset growth in mutual financial cooperatives, centered on corporate loans, is expected to continue," but also pointed out, "There is a possibility that latent risks may emerge, especially among vulnerable borrowers such as self-employed and small business owners, due to delayed economic recovery and COVID-19."

He added, "We plan to closely monitor the soundness status such as delinquency rates by borrower and industry, actively encourage enhancement of loss absorption capacity and disposal of non-performing assets, stabilize the recent rapid increase in corporate loans, and strengthen proactive risk management in preparation for potential defaults."

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