Significant Decline in Interest Income
But Growth in Non-Interest Income
NongHyup Financial Group announced that its net profit for the first half of this year reached KRW 1.6287 trillion. This represents a decrease of 6.6% (KRW 114.9 billion) compared to the same period last year.
By affiliate, NongHyup Bank accounted for the largest share with KRW 1.1879 trillion. NH Investment & Securities recorded KRW 465 billion, while NongHyup Life Insurance posted a net profit of KRW 154.7 billion.
NongHyup Financial explained that although interest income fell sharply due to declining market interest rates, non-interest income increased, driven by the activation of the capital market such as the rise in stock indices, as well as higher fees from M&A advisory and consignment brokerage, and gains from securities operations.
Interest income fell by KRW 231.5 billion year-on-year to KRW 4.0977 trillion, as the net interest margin (NIM) continued to decline. Non-interest income increased by KRW 217.5 billion to KRW 1.3296 trillion.
Profitability indicators, including return on assets (ROA) and return on equity (ROE), stood at 0.65% and 10.35%, respectively. Although these figures represent a slight decrease compared to the record results of the first half of last year, the improving trend has continued for two consecutive quarters since the end of last year. The ratio of substandard and below loans improved by 0.08 percentage points from the end of last year to 0.6%. The loan loss provision coverage ratio, which measures preparedness for credit risk, reached 180.8%, the highest among major financial holding companies. The common equity tier 1 (CET1) ratio improved by 0.21 percentage points from 12.16% at the end of last year to 12.37%.
During the first half, NongHyup Financial affiliates spent a total of KRW 325.1 billion on agricultural support projects (contributions paid by NongHyup affiliates under the Agricultural Cooperative Act for the unique purpose of supporting farmers, agriculture, and rural communities), an increase of KRW 19.6 billion (6.5%) compared to the same period last year. The amount spent on social contribution for vulnerable and marginalized groups was KRW 136 billion.
NongHyup Financial stated, "In the second half of the year, we expect to maintain a stable capital ratio, including further improvement in the CET1 ratio, based on solid business performance," and added, "We will continue to pursue social responsibility management to support agriculture, rural communities, and vulnerable groups."
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