DGB Financial, H1 Net Profit 150 Billion KRW... Down 51.6% YoY

"Increased Provision for Bad Debts on Haitoojeung PF Exposure"

DGB Financial Group announced on the 29th that it achieved a net profit attributable to controlling shareholders of 150 billion KRW in the first half of this year. This represents a 51.6% decrease compared to the record high of 309.8 billion KRW in the first half of last year. While the pre-provision operating profits of major affiliates maintained a favorable trend, the increase in allowance for credit losses related to securities firms' project financing (PF) exposure was cited as the cause of the decline in earnings.

The net profit of the core affiliate iM Bank (formerly DGB Daegu Bank) in the first half was 210.1 billion KRW, down 16.1% year-on-year. This was due to an increase in watchlist loans and higher credit loss expenses from write-offs of non-performing loans, caused by a general deterioration in the repayment ability of loan customers. Core earnings such as interest income showed a favorable trend, centered on a 5.3% growth in KRW loans compared to the end of last year.

The net profits of Hi Investment & Securities and iM Capital in the first half were 81.4 billion KRW and 27 billion KRW, respectively. In the case of Hi Investment & Securities, the company recorded a quarterly loss as it recognized a significant increase in credit loss expenses in the second quarter due to the recent tightening of evaluation standards for real estate PF projects.

Regarding the decline in earnings, DGB Financial stated, “Due to the recently increased debt repayment burden and the impact of the real estate market downturn, the allowance for credit losses at major affiliates such as banks and securities firms increased simultaneously.” However, it added, “The real estate PF risk has passed its peak, and if credit loss expenses stabilize quickly in the second half, the resilience of earnings recovery will increase.”

It further stated, “In an environment where the overall delinquency rate continues to rise due to prolonged high interest rates and sluggish domestic demand, we plan to focus more on managing credit risk in vulnerable areas during the remaining second half to stabilize asset soundness across all affiliates.”

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