DGB Financial Q1 Net Profit 111.7 Billion KRW... 33.5% Decrease YoY

Increase in Bad Debt Expenses Due to Additional Real Estate PF Provisions

DGB Financial Group announced on the 2nd that it achieved a net profit attributable to controlling shareholders of 111.7 billion KRW in the first quarter of this year. This figure represents a 33.5% decrease compared to the record high performance of 168 billion KRW in the first quarter of last year.

While interest income remained solid, DGB Financial explained that the main reasons for the decline in earnings were the base effect from the strong non-interest income (194 billion KRW) and an increase in bad debt expenses related to vulnerable exposures such as real estate project financing (PF).

DGB Financial analyzed that the performance of its core affiliate, DGB Daegu Bank, was resilient. Daegu Bank's net profit in the first quarter was 119.5 billion KRW, down 6.5% year-on-year. Interest income increased significantly due to steady growth in KRW loans, and non-interest income also maintained a favorable trend. With both quantitative and qualitative growth in the bank’s loan assets, the bank’s performance is expected to improve noticeably once bad debt expenses stabilize.

Net profits of Hi Investment & Securities and DGB Capital were 4.9 billion KRW and 13.4 billion KRW respectively, both down compared to the same period last year. The increase in provisions for bad debts related to vulnerable exposures such as real estate PF was identified as the main cause.

A DGB Financial Group official stated, “In the ongoing uncertain domestic and international environment characterized by high interest rates, high inflation, and geopolitical risks, we will focus on stabilizing asset soundness through thorough internal controls and sound management.”