BNK Financial Group Reports Q2 Net Profit of 242.8 Billion KRW... 492.3 Billion KRW for First Half

Common Equity Tier 1 Ratio Rises 0.16%p QoQ to 12.16%

All 1.65 Million Treasury Shares Bought in H1 to Be Cancelled

Interim Dividend KRW 200 Per Share, KRW 20 Billion Worth to Be Cancelled in H2

BNK Financial Group (Chairman Bin Daein) reported a net profit of 242.8 billion KRW in the second quarter of this year, bringing the total for the first half to 492.3 billion KRW.

On the 31st, BNK Financial Group announced through its earnings disclosure that its consolidated net profit attributable to controlling interests for the second quarter of 2024 reached 242.8 billion KRW (an increase of 39.4 billion KRW, +19.4% year-on-year).

Despite an increase in credit loss expenses due to higher provisions from changes in real estate PF business feasibility assessment standards and additional provisioning to strengthen loss absorption capacity, pre-provision profits such as net interest income and non-interest income increased, resulting in a year-on-year rise in net profit.

The banking sector posted a net profit of 229.3 billion KRW, an increase of 32.1 billion KRW year-on-year (Busan Bank +5.3 billion KRW, Kyongnam Bank +26.8 billion KRW).

Key Management Indicators of BNK Financial Group (above) and Net Income of Major Affiliates (below). ※As of Q1 2024, Non-performing Loan Ratio 0.85%, Delinquent Loan Ratio 0.90%, BIS Total Capital Ratio 14.24%, Common Equity Tier 1 Capital Ratio 12.00%

Key Management Indicators of BNK Financial Group (above) and Net Income of Major Affiliates (below). ※As of Q1 2024, Non-performing Loan Ratio 0.85%, Delinquent Loan Ratio 0.90%, BIS Total Capital Ratio 14.24%, Common Equity Tier 1 Capital Ratio 12.00%

The non-banking sector recorded a net profit of 41.4 billion KRW, a decrease of 800 million KRW year-on-year, due to increased provisions for bad assets despite higher profits from securities. While net profit from investment securities decreased by 7.1 billion KRW year-on-year, capital (+3.8 billion KRW), savings bank (+2.2 billion KRW), and asset management (+100 million KRW) all saw year-on-year increases in net profit.

The group’s asset soundness indicators showed a substandard and below loan ratio of 1.22% and a delinquency rate of 0.94%, up 37bp and 4bp respectively from the previous quarter. These increases reflect changes in real estate PF business feasibility assessment standards and a rise in non-performing assets due to the economic slowdown, highlighting the need for proactive asset quality management going forward.

Additionally, the group’s capital adequacy indicator, the common equity tier 1 (CET1) ratio, improved to 12.16%, up 16bp from the previous quarter, thanks to solid earnings and proactive risk-weighted asset (RWA) management in preparation for downside economic risks. The continuous improvement in the CET1 ratio has also laid the foundation for responding to potential credit risk expansion and increasing shareholder returns.

BNK Financial Group CFO Kwon Jaejung, Vice President, stated, “To enhance shareholder value, we have retired all approximately 1.65 million shares of treasury stock acquired in the first half of this year, and plan to implement an interim dividend of 200 KRW per share and a buyback and retirement of treasury stock worth 20 billion KRW in the second half.” He added, “We will do our utmost to expand shareholder return policies, including continued increases in cash dividends and active treasury stock buybacks and retirements.”