SC Jeil Bank 1Q Net Profit 126.5 Billion KRW... 18% Decrease YoY

Profits Increased but... Rising Costs in Labor and Provisions

SC First Bank's net profit for the first quarter of this year decreased by 18% compared to the same period last year. Although both interest income and non-interest income increased, the decline is attributed to the rise in various expenses and provisions.

SC First Bank announced on the 15th that it recorded an operating profit of 171.4 billion KRW and a net profit of 126.5 billion KRW for the first quarter of this year. These figures represent decreases of 11.4% and 18.4%, respectively, compared to the same period last year.

Interest income and non-interest income both grew steadily. They amounted to 340.7 billion KRW and 98.3 billion KRW, respectively, marking increases of 19.9% and 14.8% compared to the same period last year. This was due to overall asset growth and improvements in net interest margin (NIM) amid rising interest rates. Strong performance in the foreign exchange derivatives sector also contributed to the increase in non-interest income.

Nevertheless, net profit declined compared to the first quarter of last year due to increased expenses and provisions. Expenses rose to 230.6 billion KRW, a 30.6% increase from the same period last year, which is attributed to higher personnel costs following regular wage increases. Provisions also increased significantly, rising by 37.3 billion KRW from a reversal of 400 million KRW in the same period last year to a provision of 36.9 billion KRW this year. This reflects adjustments in future economic outlooks to account for potential risk factors amid expanding domestic and international uncertainties, as well as increased provisions for corporate loans and derivative product valuations.

The return on assets (ROA) was recorded at 0.51%, and the return on equity (ROE) at 9.67%. These represent decreases of 0.19 percentage points and 2.87 percentage points, respectively, compared to the same period last year. The ratio of non-performing loans (NPL) increased by 0.09 percentage points to 0.27% during the same period. The loan loss coverage ratio fell by 18 percentage points from the previous year to 244.2%.

Meanwhile, the asset size at the end of the first quarter was 104.4473 trillion KRW, an increase of 5.8% (6.055 trillion KRW) compared to the end of last year. The main factor was the increase in financial market assets due to expanded market volatility. The Bank for International Settlements (BIS) capital adequacy ratio and Tier 1 capital ratio were recorded at 21.09% and 17.41%, respectively.

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