Domestic Credit Card Companies' Net Profit in H1 Reaches 2.7 Trillion KRW... Up 73.5 Billion KRW YoY
[Asia Economy Reporter Song Seung-seop] The net profit of specialized credit finance companies in the first half of this year was recorded at 2.07 trillion KRW, an increase of 73.5 billion KRW (3.7%) from 1.9965 trillion KRW last year.
According to the Financial Supervisory Service on the 20th, the revenue of credit finance companies is attributed to interest income (698.1 billion KRW) from loan expansion, leasing (384 billion KRW), and rental services (181.6 billion KRW). However, expenses also increased in leasing (343.3 billion KRW) and rental (121.5 billion KRW), and expenses in the securities sector rose by 341.3 billion KRW.
As of the end of June, the total assets of credit finance companies stood at 226.9 trillion KRW, up 19.5 trillion KRW (9.4%) from 207.4 trillion KRW at the end of the previous year. Automobile-related lease assets increased by 2.6 trillion KRW, and new technology business finance assets grew by 400 billion KRW. Loan receivables increased by 10.6 trillion KRW, driven by corporate loans rising to 11.1 trillion KRW.
The delinquency rate rose by 0.02 percentage points to 0.88% compared to 0.86% at the end of the previous year. The ratio of non-performing loans also increased by 0.03 percentage points to 1.36% during the same period.
Allowance for loan losses increased by 80 billion KRW in the first half, rising from 3.5485 trillion KRW at the end of last year to 3.6825 trillion KRW. The adjusted capital adequacy ratio fell by 0.1 percentage points to 17.1% from 17.2% at the end of the previous year.
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The Financial Supervisory Service stated, “To prepare for the possibility of expanding latent insolvencies, we will encourage enhancing loss absorption capacity through additional provisions for loan assets,” and added, “We plan to thoroughly guide liquidity management by supplementing emergency funding plans reflecting recent financial market conditions.”
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