SC Jeil Bank Q3 Net Profit 63.7 Billion KRW... 39% Decrease YoY

"Due to Recognition of Estimated Compensation Amount for Hong Kong H Index ELS Products"

SC Jeil Bank announced on the 14th that it recorded a net profit of 63.7 billion KRW in the third quarter of this year. This represents a 39% decrease compared to the same period last year (104 billion KRW). SC Jeil Bank explained that this was due to recognizing an estimated compensation amount of 102.7 billion KRW for Hong Kong H Index (Hang Seng China Enterprises Index·HSCEI) equity-linked securities (ELS) as a one-time non-operating expense, despite a decrease in the provision for loan losses.

Interest income was 299.8 billion KRW, down 4.6% from 314.4 billion KRW in the same period last year. Although the net interest margin (NIM) improved from 1.55% in the third quarter of last year to 1.59%, an increase of 0.04 percentage points, the asset size decreased. Non-interest income recorded 42.3 billion KRW, down 11.6% year-on-year, due to a decrease in foreign exchange derivative gains despite an increase in sales commissions in the retail finance group’s wealth management (WM) division.

The return on assets (ROA) was 0.28%, down 0.15 percentage points from the same period last year, and the return on equity (ROE) was 4.61%, down 3.03 percentage points year-on-year. Due to the impact of rising interest rates and economic recession, corporate and household non-performing loans increased, causing the non-performing loan ratio to rise by 0.05 percentage points to 0.43% compared to the same period last year. The loan loss provision coverage ratio increased by 9.97 percentage points from the same period last year to 225.51%.

As of the end of September this year, the asset size recorded 91.515 trillion KRW, an increase of 5.8142 trillion KRW from 85.7008 trillion KRW at the end of December last year. The Bank for International Settlements (BIS) total capital ratio has exceeded 20% for seven consecutive quarters since the introduction of the Basel III final rules early last year, standing at 22.99%. The common equity tier 1 (CET1) ratio was 18.87%, indicating that SC Jeil Bank maintains sufficient loss absorption capacity and capital soundness.