Mutual Finance Posts 2.4 Trillion KRW Net Profit in H1, Up 31.8% YoY

Mutual Finance Sector Profit and Loss Status (Unit: 100 million KRW, %)

[Asia Economy Reporter Song Seung-seop] The net income of domestic mutual finance sectors was tentatively estimated at 2.4213 trillion KRW, an increase of 583.7 billion KRW (31.8%) from 1.8736 trillion KRW in the first half of last year.

According to the Financial Supervisory Service on the 15th, the expansion of net income in the mutual finance sector in the first half of this year was led by the financial (credit business) sector. The financial sector recorded a net income of 3.2778 trillion KRW, an increase of 911.3 billion KRW. On the other hand, the economic business sector saw an expanded deficit due to rising agricultural material prices caused by the Ukraine crisis. Losses during the same period increased from 528.9 billion KRW to 856.5 billion KRW.

By sector, Nonghyup recorded the highest net income at 1.9744 trillion KRW. Shinhyup followed with 288.3 billion KRW, and Suhyup with 119.3 billion KRW. The Korea Forest Cooperative recorded negative growth with 39.3 billion KRW in the first half of last year.

Total assets increased by 29.8 trillion KRW (4.7%) from 631.1 trillion KRW at the end of last year to 660.9 trillion KRW. The average assets per 2,217 cooperatives totaled 298.2 billion KRW, up 13.9 billion KRW (4.9%) from 284.3 billion KRW during the same period. Total loans increased by 27.5 trillion KRW (6.1%) to 481.4 trillion KRW, and total deposits rose by 26.9 trillion KRW (5.0%) to 565.9 trillion KRW.

The delinquency rate rose by 0.15 percentage points from 1.17% at the end of last year to 1.32%. The delinquency rate had previously increased from 1.71% at the end of 2019 to 1.55% at the end of June last year. The delinquency rates for household loans and corporate loans both slightly increased to 0.88% and 1.88%, respectively. The ratio of non-performing loans classified as substandard or below was 1.73%. The net capital ratio slightly decreased to 8.24% from 8.31% at the end of last year but remained at a favorable level compared to the minimum regulatory ratio.

The Financial Supervisory Service analyzed that soundness indicators such as the delinquency rate slightly worsened compared to the end of last year, and the possibility of increased insolvency remains due to uncertainties in the financial market caused by additional interest rate hikes and economic slowdown. The Financial Supervisory Service stated, “We will promote the advancement of soundness regulations and enhance loss absorption capacity by additionally reserving allowance for loan losses to help cooperatives maintain soundness. We will also work to reduce borrowers’ financial burdens through expanding customized debt adjustment systems and smoothly implementing the right to request interest rate reductions.”

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