NH Nonghyup Financial Group reported a Q2 net profit of 910.4 billion won, down 0.47% from the same period last year, according to a disclosure on July 24. Despite the quarterly dip, the group achieved a record first-half cumulative profit of 1.7791 trillion won, up 9% year-over-year. The Q2 profit decline was attributed to capital dilution effects from a 1.2 trillion won capital increase completed at the end of Q2 through Nonghyup Central Association. The Korean financial holding company's stocks distributed the capital across key subsidiaries: 500 billion won to banking, 400 billion won to securities, and 100 billion won to capital operations. The capital injection is expected to strengthen business competitiveness and accelerate profitability improvements in the second half of the year, according to the company.
NH Nonghyup Financial Group Reports Q2 Net Profit of 910.4 Billion Won
NH Nonghyup Financial Group's Q2 net profit on a controlling interest basis reached 910.4 billion won, representing a 0.47% decrease compared to 914.7 billion won in the same period last year. The first-half cumulative net profit totaled 1.7791 trillion won, up 9% (150.4 billion won) from 1.6287 trillion won in the prior-year period.
Q2 interest income stood at 2.2279 trillion won, up approximately 9% from 2.0335 trillion won in the same period last year. Non-interest income reached 1.0563 trillion won, increasing more than 44% from 732.5 billion won year-over-year.
Fee income for the first half totaled 1.6814 trillion won, up 71.2% compared to the same period last year, driven by increased stock trading brokerage revenue and expanded assets under management (AUM). Securities and foreign exchange sector revenue reached 957.3 billion won, up 0.6% during the same period through strategic operations despite rising market interest rates.
The net interest margin (NIM) for the banking and card subsidiaries in Q2 was 1.74%, down 1 basis point from the previous quarter (1.75%) but up 7 basis points from year-end levels. The group explained it increased quality assets centered on core deposits and corporate finance.
Q2 corporate loan net increase amounted to 8.4 trillion won compared to the same period last year. Compared to year-end, corporate loans increased by approximately 3.7 trillion won.
Group Completes 1.2 Trillion Won Capital Increase in Q2
NH Nonghyup Financial Group completed a 1.2 trillion won capital increase at the end of Q2, with Nonghyup Central Association injecting capital into core subsidiaries. The capital was distributed with 500 billion won allocated to banking operations, 400 billion won to securities, and approximately 100 billion won to the capital subsidiary.
The group's return on assets (ROA) and return on equity (ROE) stood at 0.78% and 11.79% respectively. ROA remained unchanged from the previous quarter, while ROE declined 0.06 percentage points.
An NH Nonghyup Financial official stated, "Despite the capital dilution effect from the capital increase at the end of June, we achieved record-high performance on a first-half basis and recorded favorable profitability."
Subsidiary Performance Shows Mixed Results in First Half
Most group subsidiaries showed increased net profit compared to the previous quarter. However, NH Nonghyup Bank and insurance subsidiaries reported decreased first-half cumulative net profit compared to the previous year.
NH Nonghyup Bank's net profit on a first-half cumulative basis reached 1.1629 trillion won, down 2.1% from 1.1879 trillion won in the same period last year. During the same period, insurance subsidiaries NH Nonghyup Life and NH Nonghyup Non-Life Insurance saw net profit decreases of 119.6 billion won and 15.8 billion won respectively, slowing the group's overall profit growth.
In contrast, NH Investment & Securities benefited from capital market revitalization, with first-half net profit reaching 965.2 billion won, up 107.5% (501 billion won) from 465.1 billion won in the same period last year.
Asset management subsidiary NH-Amundi Asset Management posted strong performance with first-half cumulative net profit of 69.4 billion won, up 342.7% compared to the same period last year.
Capital Ratios Improve with CET1 Reaching 12.97%
The group's Q2 non-performing loan ratio remained at 0.65%, unchanged from the previous quarter. Capital ratios showed improvement trends. The group's Q2 common equity tier 1 (CET1) ratio reached 12.97%, up 0.59 percentage points from 12.38% in the same period last year.
NH Nonghyup Financial plans to lead regional economic revitalization efforts. The group plans to establish the "NH Microfinance Foundation" (tentative name) within this year through a joint contribution of 100 billion won from major subsidiaries. Additionally, the group plans to launch the "NH Financial Hub" (tentative name) in the Jeonbuk region within Q3 to provide full-scale financial support for agri-bio, artificial intelligence (AI), and renewable energy industries.
FAQ
What was NH Nonghyup Financial Group's net profit in Q2?
NH Nonghyup Financial Group reported a Q2 net profit of 910.4 billion won, down 0.47% from 914.7 billion won in the same period last year, according to the disclosure on July 24.
How much capital did NH Nonghyup Financial Group raise in Q2?
The group completed a 1.2 trillion won capital increase at the end of Q2 through Nonghyup Central Association, with 500 billion won allocated to banking, 400 billion won to securities, and 100 billion won to the capital subsidiary.
Which NH Nonghyup subsidiary showed the strongest profit growth in the first half?
NH-Amundi Asset Management posted the strongest growth with first-half net profit of 69.4 billion won, up 342.7% compared to the same period last year, followed by NH Investment & Securities with a 107.5% increase to 965.2 billion won.
