BNK Financial, Q1 Net Profit 197.2 Billion Won... 40% Increase Driven by Non-Bank and Non-Interest Income Growth

Busan Bank 95.2 Billion, Gyeongnam Bank 53.2 Billion

[Asia Economy Reporter Kim Hyo-jin] BNK Financial Group announced on the 29th that it recorded a net profit of 192.7 billion KRW in the first quarter of this year. This is an increase of 55 billion KRW (39.9%) compared to the same period last year.

BNK Financial stated, "Our two-track strategy of shifting the business portfolio towards expanding revenue in non-bank and non-interest sectors in response to recent changes in the banking industry is showing results."

Looking at major affiliates, Busan Bank posted a net profit of 95.2 billion KRW and Gyeongnam Bank 53.2 billion KRW, influenced by an increase in interest-earning assets. BNK Capital achieved 34 billion KRW, an increase of 14.8 billion KRW compared to the same period last year.

BNK Investment & Securities showed significant growth with commission and securities-related income rising sharply, achieving 31.5 billion KRW, a substantial increase from 6.8 billion KRW in the same period last year.

BNK Financial explained, "Since the beginning of this year, we have been responding to rapid changes in the financial industry and attempting to transform into an investment-specialized financial group for BNK's future growth. As a result, the proportion of non-bank net profit rose sharply to 32.9%, about double the 16.5% recorded in the same period last year."

It is also evaluated that the soundness indicators continue to maintain a favorable level.

Due to factors such as a decrease in regional defaults and bankruptcies, the ratio of non-performing loans (NPL) fell by 0.35 percentage points to 0.73%, and the delinquency rate improved by 0.35 percentage points to 0.49% compared to the same period last year.

The group's capital adequacy ratio, measured by the common equity tier 1 (CET1) ratio, showed a slight decrease of 0.05 percentage points to 9.48% compared to the same period last year. However, it is expected that the capital ratio will rise significantly if the Financial Supervisory Service approves the application of the internal ratings-based approach within the group this year.

Jung Sung-jae, Head of Group Strategy and Finance at BNK Financial Group, said, "Despite the challenging financial environment due to COVID-19, we will continue to pursue profitability enhancement strategies centered on the non-bank sector to exceed our target net profit. This year, we will make our best efforts to raise the undervalued stock price to a level that reflects the corporate value through measures such as increasing the dividend payout ratio."