NH NongHyup Financial Group racked up 596.3 billion won in net profit in the first quarter of 2022, down 1.3 percent from the previous year.
NH NongHyup Financial Group attributed the drop in net profit to additional provisioning and a decrease in non-interest income. In the first quarter of this year, an additional 112 billion won was accumulated as a loan provision related to the COVID-19 pandemic, resulting in a one-time cost.
The drop was also blamed on a decline in operating profit due to increased volatility in the financial market as the financial market entered an interest rate hike period this year.
In particular, securities and foreign exchange/derivative gains shrank by 216.8 billion won compared to the same period of 2021 due to increased volatility in the financial market, such as a decline in the stock market and an increase in bond interest rates in the non-interest income sector.
As a result, NH NongHyup Financial Group’s non-interest income fell by 281 billion won from the previous year to 313.9 billion won.
By affiliate, NH NongHyup Bank’s net income rose 8.9 percent from the previous year to 446.3 billion won, showing a solid upward trend.
Although additional provisions were preemptively accumulated in response to volatility in the financial market, bad debt expenses fell 28.9 percent year on year due to the normalization of large non-performing loans, driving the growth of earnings.
On the other hand, among non-bank affiliates, NH Investment & Securities’ net income fell by 60.2 percent from the previous year to 1,024 billion won.
In the first quarter of this year, the net profit of many securities companies declined due to interest rate hikes and a decrease in stock trading volume, but NH Investment & Securities suffered a relatively large decline.
NongHyup Life Insurance and NongHyup Property & Casualty Insurance, which are insurance affiliates of NH NongHyup Financial Group, racked up net profits of 43 billion won and 34.3 billion won, respectively, in the first quarter, up slightly from the previous year.
In the meantime, NH NongHyup Financial Group will make a big improvement to its non-face-to-face process.
In June, All One Bank, the financial group’s flagship smartphone app will be transformed to a comprehensive financial platform.
The financial group announced on April 26 that it held the second DT Promotion Supreme Council meeting of 2022, with the participation of chief digital officers from all of its affiliates, at its headquarters in Jung-gu, Seoul on April 25.
At the beginning of this year, NH NongHyup Financial Group selected top-ranking digital tasks that the CEOs of its affiliates will be responsible for, and are focused on boosting company-wide efforts.
In particular, NH NongHyup bank is carrying out tasks in close cooperation with six departments to provide a better customer experience by improving processes for product groups.
Accordingly, the proportion of non-face-to-face product sales increased by about 8.6 percentage points in the first quarter of 2022 compared to the same period of the previous year.
NH NongHyup Financial Group also embarked on the major task of creating a group data business ecosystem. As part of this, it is implementing a digital marketing platform (DMP) construction project to collect, analyzing and providing MyData integrated customer behavior data.
In celebration of its 10th anniversary in March, NH NongHyup Financial Group announced “At Every Moment of Finance, NH NongHyup Financial Group Stand by You” as its new vision.
In the digital finance sector, a video was produced and shown at the meeting on the day. The video shows a meeting about the new vision between NH NongHyup Financial Group Chairman Son Byung-Hwan and artificial intelligence (AI) assistant manager Lee Ro-woon.
Chairman Son called on employees to endeavor for a comprehensive overhaul of the digital sector performance management system for the objective measurement of the group’s digital transformation (DT) level in the future.
“NH NongHyup Financial Group will introduce a customer-oriented comprehensive financial platform in June,” Chairman Son said.