NongHyup Financial Group announced on April 30 that its net profit amounted to 714 billion won in the first quarter of 2025.
This was a 10.7 percent increase from 64.48 billion won in the first quarter of 2024 and a 415.1 percent increase from 13.86 billion won in the previous quarter.
“Increased sales of bancassurance due to a forecast for a drop in the interest rate, an increase in non-interest income due to the expansion of e-banking in line with a digital transformation and the base effects of voluntary adjustment compensations for equity-linked trusts (ELTs),” a NongHyup Financial Group official explained.
NongHyup Financial Group saw its interest income decrease and non-interest income increase during the period. In the first quarter, its interest income sat at 2,064.2 billion won, down 6.0 percent or by 123.4 billion won from the same period of 2024.
NongHyup Bank, a major subsidiary of NongHyup Financial Group, ran an emergency management system as its interest income stood at 1,845.9 billion won, down 6.9 percent by 137 billion won.
The financial group’s net interest margin (NIM), an indicator that can show the profitability of financial companies, continued to decline from 2.00 percent at the end of March of 2024 to 1.75 percent at the end of March of 2025.
“NongHyup Financial Group’s NIM fell as the market interest rate contracted due to the expectations of interest rate cuts, which led to a larger drop in lending rates linked to the market interest rate,” a NongHyup Financial Group official said.
“NongHyup Financial Group will continue to manage its NIM at an appropriate level through efficient asset management centered on quality assets and the reduction of procurement costs.”
NongHyup Financial Group’s non-interest income rose by 18.3 percent, or 597.1 billion won, in the first quarter, driven by the growth of its fee income related to bancassurance, e-finance, and investment banking, mainly from major affiliates, such as banking and securities affiliates, while gains and losses on securities decreased due to deteriorating market conditions.
NongHyup Financial Group’s non-performing loan (NPL) ratio, a key asset quality indicator, climbed from 0.56 percent to 0.72 percent. Its return on equity (ROE), a profitability indicator, ascended by 0.57 percentage points to 9.16 percent.
NongHyup Financial Group spent 162.5 billion won on agricultural support projects in the first quarter to help Korean farmers struggling with rising prices and climate change. The amount was an increase of 6.4 percent or 9.7 billion won from a year ago.
The agricultural support project fees are contributions paid by NongHyup affiliates to support farmers, agriculture, and rural areas in Korea which is a unique purpose of NongHyup under the NongHyup Act.
NongHyup Financial posted 82.89 billion won in consolidated net profit before payment of funds for agricultural support projects.
NongHyup Bank posted a net profit of 554.4 billion won, a big increase of 31.5 percent or 132.9 billion won compared to 421.5 billion won in the same period of 2024.
In addition, NH Investment & Securities earned a net profit of 208.2 billion won, NongHyup Life Insurance a net profit of 65.1 billion won, NongHyup Property & Casualty Insurance a net profit of 20.4 billion won and NongHyup Capital a net profit of 15.7 billion won.
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