Yeojeonsa Last Year's Net Profit 3.4 Trillion Won... 23.6% Decrease Compared to Previous Year

Delinquency Rate at 1.25%, Up 0.39%p Compared to End of 2021

As of the end of last year, the net profit of credit finance companies was 3.4067 trillion KRW, a decrease of 23.6% (1.0495 trillion KRW) compared to the previous year (4.4562 trillion KRW). However, excluding the impact of valuation gains and losses on specific company stocks held by new technology finance companies, the net profit of credit finance companies increased by 4.2% compared to the previous year.

On the 3rd, the Financial Supervisory Service announced that as of last year, the total assets of 148 domestic specialized credit finance companies amounted to 232 trillion KRW, an increase of 11.9% (24.6 trillion KRW) compared to the end of the previous year (207.4 trillion KRW). Domestic credit finance companies consist of 25 installment finance companies, 26 leasing companies, and 97 new technology finance companies.

The delinquency rate rose by 0.39 percentage points to 1.25% compared to 0.86% at the end of 2021, and the ratio of non-performing loans classified as substandard or below was 1.54%, up 0.21 percentage points from 1.33% at the end of the previous year.

Allowance for loan losses was additionally accrued by 644.2 billion KRW. The allowance for loan losses (including loan loss reserves) increased from 3.5485 trillion KRW at the end of 2021 to 4.1927 trillion KRW last year. The coverage ratio, which represents the total allowance for loan losses balance against non-performing loans classified as substandard or below, was 142.0%, down 9.4 percentage points from 151.4% at the end of the previous year. However, it still exceeded the regulatory ratio (7%).

The Financial Supervisory Service stated, "In preparation for uncertainties in the domestic and international economic and financial environment, such as additional U.S. interest rate hikes this year and concerns about economic downturns, we will guide credit finance companies to adequately accrue allowance for loan losses to strengthen loss absorption capacity. Additionally, we will closely monitor trends in the credit finance bond issuance market and proactively guide responses to liquidity risks if necessary."

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