NongHyup Financial Group Posts Cumulative Net Income of 2.26 Trillion Won in Q3, Down 1.8% Year-on-Year

Continued Decline in Net Interest Margin: Underlying Causes

NongHyup Financial Group announced on October 31 that its cumulative net income for the third quarter of this year reached 2.2599 trillion won. This figure represents a 1.8% decrease compared to the same period last year. NongHyup Financial Group explained that, despite negative factors such as a continued decline in net interest margin (NIM) due to falling market interest rates and a rise in insurance loss ratios, robust third-quarter results were driven by growth in non-interest income, including profits from securities operations and increased fees from M&A advisory and brokerage commissions, supported by the revitalization of the capital market.

By subsidiary, NongHyup Bank accounted for the largest portion with 1.5796 trillion won, followed by NH Investment & Securities with 748.1 billion won and NongHyup Life Insurance with 210.9 billion won, all showing balanced performance.

Net interest income fell by 3.2% year-on-year to 6.1863 trillion won, as the decline in net interest margin (NIM) continued. Non-interest income increased by 320.3 billion won (20.6%) year-on-year to 1.8766 trillion won, driven by higher fees and profits from securities and foreign exchange derivatives. Specifically, profits from securities and foreign exchange derivatives rose by 24.4% year-on-year to 264.1 billion won, while fee income increased by 12.5% to 167.9 billion won.

In particular, NH Investment & Securities led the group's non-interest income growth through balanced growth across all business divisions, thereby strengthening its market position. As of August this year, the number of clients with assets of 1 billion won or more increased by 33.6% compared to the end of last year, and according to the September league table, the company ranked first in paid-in capital increases and second in both corporate bonds and initial public offerings (IPOs).

Chanwoo Lee, Chairman of NongHyup Financial Group. Photo by NongHyup Financial Group

As a result of proactively strengthening risk management to prepare for internal and external economic volatility, asset quality indicators such as the ratio of non-performing loans improved significantly, securing a stable earnings base. The ratio of non-performing loans stood at 0.58%, an improvement of 0.1 percentage points compared to the end of last year. The loan loss reserve ratio, which prepares for potential future credit risk, reached 186.4%, the highest among major financial holding companies.

Thanks to the group's efforts to strengthen risk and soundness management, the provision for credit loss in the third quarter of this year was 493.1 billion won, a decrease of 188.1 billion won (27.6%) compared to the same period last year. Profitability indicators such as return on assets (ROA) and return on equity (ROE) were 0.60% and 9.48%, respectively, showing a slight decline compared to the record highs achieved in the same period of 2024.

During the third quarter of this year, NongHyup Financial Group's affiliates spent a total of 487.7 billion won on agricultural support projects, an increase of 29.4 billion won (6.4%) year-on-year. The amount contributed to social responsibility activities, including support for agriculture, rural communities, local communities, and disaster relief, was 186.4 billion won.

Based on its solid performance, NongHyup Financial Group plans to actively promote 'productive finance' and continue to fulfill its social responsibility management, aimed at enhancing the value of agriculture and rural communities and supporting vulnerable groups.

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