BNK Financial Group Reports Q1 Net Profit of 249.5 Billion KRW, Down 2.8% YoY

BNK Financial Group announced on the 30th that its consolidated net income attributable to controlling interests for the first quarter of this year reached 249.5 billion KRW. This represents a 2.8% (7.3 billion KRW) decrease compared to the same period last year (256.8 billion KRW).

During the same period, interest income and non-interest income increased by 9.1 billion KRW and 9.2 billion KRW, respectively, reaching 740 billion KRW and 117.4 billion KRW. Selling and administrative expenses decreased by 12.8 billion KRW, resulting in a 31.1 billion KRW increase in pre-provision profit. However, BNK Financial Group set aside an additional 44.2 billion KRW in provisions to expand loss absorption capacity. Consequently, loan loss expenses increased by 40.9 billion KRW compared to the previous year, causing a slight decline in net income.

The banking sector recorded a net income of 226.4 billion KRW, down by 3.9 billion KRW compared to the same period last year (Busan Bank decreased by 20.1 billion KRW, Gyeongnam Bank increased by 16.2 billion KRW).

The non-banking sector showed a net income of 54.7 billion KRW, a decrease of 3.7 billion KRW year-on-year, despite increased gains related to securities, due to higher provision expenses. Investment securities (-4.5 billion KRW) and asset management (-0.4 billion KRW) both saw declines in net income compared to the previous year. Conversely, capital (+1.9 billion KRW) and savings banks (+0.1 billion KRW) experienced increases in net income year-on-year.

Meanwhile, the group’s asset quality indicators showed that the ratio of non-performing loans (NPL) was 0.85%, and the delinquency ratio was 0.90%, rising by 12 basis points and 30 basis points respectively from the previous quarter. This reflects the deterioration in borrowers’ debt repayment ability due to economic slowdown and interest rate hikes, indicating the need for proactive asset quality management going forward.

The group’s capital adequacy indicator, the Common Equity Tier 1 (CET1) ratio, improved to 12.00%, up 31 basis points from the previous quarter, due to adequate profit realization and active risk-weighted assets (RWA) management in preparation for downside economic risks. The improvement in the CET1 ratio signifies strengthened resources to prepare for future credit risk expansion and to increase shareholder returns.

Kwon Jae-jung, Vice Chairman and CFO of BNK Financial Group, stated, “Based on the improved CET1 ratio, we plan to gradually increase dividends per share and further strengthen shareholder return policies by actively pursuing share buybacks and cancellations.”