NH NongHyup Financial posts record W2.53tr profit through Q3

NH NongHyup Financial Group posted a net profit of 2.53 trillion won ($1.91 billion) through the third quarter of this year, the highest since the group's founding. Stable earnings from its banking arm, combined with a surge in profits at NH Investment & Securities and other capital market affiliates riding a buoyant stock market, lifted the group's overall performance.

The cumulative net profit through the third quarter rose 11.9 percent from 2.26 trillion won in the same period last year, according to NH NongHyup Financial. The group surpassed its full-year net profit from last year in just nine months. Operating profit also climbed 16.0 percent to 4.61 trillion won.

The standout feature of the results was the growth of non-banking affiliates, particularly those in capital markets. NH Investment & Securities posted cumulative net profit of 1.35 trillion won, up 80.3 percent from the same period last year. NH-Amundi Asset Management also delivered net profit of 88.7 billion won, a 242.3 percent increase over the same period. NH NongHyup Bank, the group's core affiliate, contributed 1.75 trillion won — up 172.7 billion won year on year — providing a solid earnings floor.

With the bank's earnings base and the capital market affiliates' growth reinforcing each other, the group's revenue mix became more diversified. Interest income grew 7.5 percent to 6.65 trillion won, driven by corporate lending growth, while non-interest income rose 38.5 percent to 2.6 trillion won. Fee income in particular surged 55.9 percent to 2.35 trillion won, boosted by higher equity trading volumes and an expansion of assets under management.

NH NongHyup Financial's corporate loan book grew by 12.6 trillion won compared with the same period last year. The combined net interest margin for the bank and card units also improved, rising from 1.67 percent at the end of last year to 1.71 percent at the end of September. The results reflect the simultaneous contribution of higher non-interest income from capital market strength and the bank's expansion in corporate finance.

Performance varied noticeably across affiliates, however. While securities and asset management profits surged, NH NongHyup Life Insurance saw its cumulative net profit through the third quarter fall sharply to 6.8 billion won from 210.9 billion won in the same period last year. NH NongHyup Property & Casualty Insurance and NH NongHyup Capital also posted declines, recording 95 billion won and 48.8 billion won, respectively.

Capital adequacy improved after the group received a paid-in capital increase of around 1.2 trillion won from the National Agricultural Cooperative Federation in June. As of the end of September, the Common Equity Tier 1 ratio stood at 13.05 percent, the Tier 1 capital ratio at 15.09 percent, and the total capital ratio at 16.16 percent. NH NongHyup Financial said it distributed the additional capital to key affiliates to strengthen its medium- to long-term growth foundation.

Asset quality indicators retreated somewhat from last year's levels, however. The group's substandard-and-below loan ratio rose to 0.65 percent from 0.51 percent at the end of September last year, while the loan loss reserve coverage ratio fell to 144.67 percent from 189.64 percent. NH NongHyup Bank's delinquency rate also edged up to 0.54 percent from 0.46 percent over the same period.

The group's consolidated total assets as of the end of September stood at 655.2 trillion won, up 8.7 percent from the end of last year. Including trust and assets under management, total assets reached 878.8 trillion won, a 9.2 percent increase.

Meanwhile, NH NongHyup Bank was recently selected as the primary treasury bank for the planned integrated special city of South Jeolla Province and Gwangju, and will manage general accounts, regional development funds and administrative integration fiscal support funds for four years starting in 2027. Gwangju Bank will serve as the secondary treasury bank, overseeing special accounts and funds.