NongHyup Financial Group (NH Financial Group) posts record 2.5278 trillion won in net profit for the first three quarters

[Financial News] NH Financial Group's cumulative net profit for the first three quarters topped 2.5 trillion won. The figure has already surpassed last year's full-year net profit, putting the group on track to post its best-ever results this year. The growth reflects stable interest income at the bank, combined with improved performance at non-bank affiliates, including securities and asset management firms.
According to NH Financial Group on the 28th, net profit attributable to controlling shareholders in the third quarter was 748.7 billion won, up 117.5 billion won from 631.2 billion won a year earlier. It fell by 161.7 billion won compared with the previous quarter's 910.4 billion won.
Cumulative net profit for the first through third quarters of this year was 2.5278 trillion won, up 11.9% from 2.2599 trillion won in the same period last year. The group surpassed last year's full-year net profit in just three quarters, posting its best-ever results since its launch.
Cumulative interest income rose 7.5% year on year to 6.6497 trillion won. Growth in corporate lending and management of funding costs supported the increase. Nonghyup Bank's net interest margin (NIM) rose to 1.71% at the end of September this year from 1.67% at the end of last year. In the third quarter alone, however, interest income was 2.2075 trillion won, down 20.4 billion won from 2.2279 trillion won in the previous quarter.
Cumulative non-interest income increased 38.5% from the same period last year to 2.5986 trillion won. Fee income surged 55.9% to 2.3496 trillion won in particular. The increase was driven by higher securities brokerage revenue amid more active stock trading and an expansion in assets under management. Third-quarter non-interest income was 638.7 billion won, down 417.6 billion won from 1.0563 trillion won in the second quarter.
Among the affiliates, Nonghyup Bank posted cumulative net profit of 1.7523 trillion won, up 10.9% year on year. NH Investment & Securities saw an 80.3% surge to 1.3489 trillion won. NH-Amundi Asset Management also recorded net profit of 88.7 billion won, up 242.3% year on year.
By contrast, the insurance affiliates performed poorly. NH NongHyup Life Insurance's cumulative net profit fell sharply to 6.8 billion won from 210.9 billion won in the same period last year. NH NongHyup Property & Casualty Insurance also saw net profit fall 22.1% year on year to 95 billion won.
Capital adequacy improved. After receiving a paid-in capital increase of about 1.2 trillion won from the National Agricultural Cooperative Federation in June, NH Financial Group allocated capital to key affiliates. As of the end of September, its total capital ratio stood at 16.16%, its Tier 1 capital ratio at 15.09%, and its Common Equity Tier 1 (CET1) ratio at 13.05%.
The return on assets (ROA), a profitability indicator, rose 0.06 percentage points to 0.66% at the end of September this year from 0.60% at the end of September last year. Over the same period, return on equity (ROE) also increased 0.23 percentage points, from 9.49% to 9.72%. Before deducting agricultural support expenses, ROA and ROE stood at 0.74% and 11.12%, respectively.
Some asset-quality indicators came under pressure, however. The non-performing loan ratio stood at 0.65% at the end of September, up 0.14 percentage points from 0.51% in the same period last year. The loan-loss reserve coverage ratio also fell over the same period, from 189.64% to 144.67%.
NH Financial Group plans to expand community-based finance and strengthen support for productive and inclusive finance. Cumulative agricultural support expenses for the first three quarters of this year totaled 519.8 billion won, up 6.6% year on year, while social contribution spending amounted to 179.6 billion won.

[email protected] Seo Ji-yoon Reporter