NH NongHyup Financial Group posted a first-half net profit of 1.7 trillion won ($1.16 billion), a record for any half-year period. The result reflects balanced growth across all business lines, with both interest and non-interest income rising despite a prolonged environment of high interest rates and a weak won.
According to second-quarter earnings disclosed Friday, net profit attributable to controlling shareholders reached 1.78 trillion won for the first half, up 9.2 percent, or 150.4 billion won, from the same period last year. Second-quarter net profit alone came to 910.4 billion won, up 41.7 billion won from the first quarter's 868.7 billion won.
First-half operating profit rose 14.0 percent year on year to 3.2 trillion won from 2.81 trillion won a year earlier, while pretax profit climbed 565.4 billion won to 3.01 trillion won.
A standout was the surge in non-interest income, which jumped 47.4 percent, or 630.3 billion won, to 1.96 trillion won in the first half. Fee income soared 71.2 percent to 1.68 trillion won, driven by simultaneous growth in equity brokerage revenue and assets under management as capital markets remained active. Securities and foreign-exchange income edged up 0.6 percent to 957.3 billion won, holding roughly steady despite bond valuation losses from rising market interest rates.
Interest income grew 8.4 percent, or 344.5 billion won, to 4.44 trillion won. The group's net interest margin improved as high-quality assets expanded — led by core deposits and corporate banking — and funding costs were kept in check. The combined NIM for the bank and card units rose 0.07 percentage points to 1.74 percent in June from 1.67 percent in December last year. Corporate loan balances increased 8.4 trillion won year on year and grew a net 3.7 trillion won from the end of last year.
Return on equity stood at 11.79 percent and return on assets at 0.78 percent, both measured before deducting agricultural support program costs. The group said it maintained solid profitability and delivered a record first-half result even as the June rights offering had a dilutive effect on capital.
The non-performing loan ratio held steady at 0.65 percent as of end-June, unchanged from end-March, though it was up 0.05 percentage points from 0.60 percent a year earlier. The loan-loss coverage ratio fell to 155.31 percent from 182.54 percent a year ago. First-half credit loss provisions increased 77.6 billion won to 408.8 billion won, while selling and administrative expenses rose 483.2 billion won to 2.96 trillion won.
Consolidated total assets as of end-June reached 666 trillion won, up 10.5 percent from the end of last year. Including trust assets and AUM, total assets stood at 884.8 trillion won. Loan receivables grew 1.4 percent to 381.2 trillion won, while deposits rose 6.3 percent to 375.9 trillion won.
Among subsidiaries, NH Investment & Securities led the group's earnings improvement, with first-half net profit surging 107.5 percent to 965.2 billion won from 465 billion won a year earlier. NH-Amundi Asset Management posted net profit of 69.4 billion won, up 342.7 percent, while NH Savings Bank returned to the black with net profit of 3.8 billion won.
By contrast, NH NongHyup Bank — the group's largest subsidiary — saw net profit slip 2.1 percent, or 25 billion won, to 1.16 trillion won from 1.19 trillion won a year earlier. Net profit at NH NongHyup Life Insurance fell 119.6 billion won year on year to 35.1 billion won, and NH NongHyup Property & Casualty Insurance dropped 15.8 billion won to 71.7 billion won. NH NongHyup Capital declined 8.7 billion won to 35.4 billion won.
At NH NongHyup Bank, interest income rose 320.7 billion won to 3.98 trillion won and fee income climbed 61.5 billion won to 440.4 billion won, but securities investment income fell 188.5 billion won to 228.2 billion won. Credit loss provisions also increased 109 billion won to 297.2 billion won, weighing on the bottom line. As of end-June, the bank's NIM stood at 1.74 percent, its delinquency rate at 0.53 percent, and its NPL ratio at 0.52 percent.
In June, NH NongHyup Financial received a 1.2 trillion won rights offering from the National Agricultural Cooperative Federation to strengthen its capital base. It used the proceeds to inject a combined 1 trillion won into key subsidiaries — 500 billion won into NH NongHyup Bank, 400 billion won into NH Investment & Securities, and 100 billion won into NH NongHyup Capital. The group said the full benefit of the capital injection is expected to materialize in the second half, accelerating profitability improvements.
In addition, the group spent 346.5 billion won on agricultural support programs and 129 billion won on social contribution activities in the first half. Within the year, major subsidiaries plan to jointly contribute 100 billion won to establish a tentatively named NH Miso Finance Foundation, which will supply tailored financial products for farmers and young people returning to agriculture. Following the opening of a comprehensive maritime, aviation and defense industry support center in Changwon, South Gyeongsang Province, in April, the group also plans to launch a tentatively named NH Financial Hub in North Jeolla Province in the third quarter to provide financial support for the agri-biotech, AI and renewable energy sectors.
won@heraldcorp.com
