NongHyup Financial Group Racks Up 2,230.9 Billion Won in Net Profits in 2022

Chairman Lee Suk-joon of NongHyup Financial Group. (Photo: NH NongHyup Financial Group)

NongHyup Financial Group announced on Feb. 14 that its net profit in 2022 reached 2,230.9 billion won, down 2.7 percent from 2,291.9 billion won in the previous year.

The financial group explained that the drop is blamed on a decrease in securities management profits due to interest rate hikes and a drop in stock prices, and the preemptive accumulation of about 400 billion won in provisions for bad debts to improve the ability to absorb future losses.

It posted 2,538.5 billion won in net profits before payment of agricultural support expenses that are provided annually for the agricultural industry, farming communities and farmers.

Its interest income grew by 12.3 percent year on year to 9,555.9 billion won, driven by the growth of loan assets centered on corporate loans.

On the other hand, its non-interest income amounted to 657.7 billion won, down 62 percent from 2021 due to decreases in securities management gains and commission income.

NongHyup Financial Group’s asset soundness index continued its strong trend, logging a non-performing loan (NPL) ratio of 0.30 percent and a loan loss provisioning ratio of 251.13 percent.

Its profitability indicators are a return on equity (ROE) of 9.33 percent and a return on assets (ROA) of 0.46 percent.

Before payment of the agricultural support expenses, they stood at 10.62 percent and 0.52 percent, respectively.

Net profits of NongHyup Bank, a major subsidiary of NongHyup Financial Group, stood at 1,718.2 billion, up 10.5 percent from the previous year.

Among non-banking subsidiaries, NH Investment & Securities racked up 303.4 billion won in net profits, NongHyup Life Insurance 217 billion won, NongHyup General Insurance 114.7 billion won, and NongHyup Capital 103.1 billion won.

Last year, NongHyup Financial Group's credit loss provisioning amounted to 782 billion won, an increase of 469.5 billion won from the previous year.

NongHyup Financial Group supplied a total of 1,090.5 billion won, including 450.5 billion won in agricultural support funds and 640 billion won in dividends, to the National Agricultural Cooperative Federation (NACF).

The funds were used as a financial source to support farmers, agricultural and rural communities, and stabilize prices of agricultural products.

In addition, it spent 173.1 billion won in social contributions to support the vulnerable and the underprivileged.

“NongHyup Financial Group will continuously boost its profitability and expand growth potential by strengthening risk management for potential insolvent assets due to an economic slowdown, sharpening its competitiveness in the market through the intensive promotion of core businesses in each sector and securing future growth engines through the development of new businesses,” said an official of NongHyup Financial Group.

Strengthen Internal Control and Financial Consumer Protection

According to NongHyup Financial Group on Feb. 8, Chairman Lee Seok-joon held his first meeting of the Compliance Monitoring and Financial Consumer Protection Council since taking office at the headquarters in Jung-gu, Seoul on Feb. 7.

“Strengthening internal control and practicing financial consumer protection are key factors directly related to the survival of an organization,” Lee said.

“Giving consumers trust and confidence and providing good services are the ultimate goal of a financial company through these activities.”

“Not internal control and consumer protection by external market watchdog authorities but securing customer trust through autonomous internal control matters most at financial companies in the era of financial innovation facing us at the moment,” Lee added.

“I ask employees to take a more active and leading role in order to further increase consumer trust in line with this paradigm shift.”

Promoting Differentiation by Strengthening Global Business Power

NongHyup Financial Group held a New Year's meeting with 21 overseas branches in 10 countries at its headquarters in Jung-gu, Seoul on Jan. 27.

The meeting was the first step to directly communicating with the frontlines after taking office as Lee, encouraging the efforts of overseas branch workers and sharing ideas for the group’s future global businesses.

At the meeting, the participants selected NongHyup Financial Group’s top global business items for 2023 - sharpening overseas branches’ competitiveness, ramping up strategic investment to secure sustainable growth engines and new business promotion in connection with digital businesses, strengthening human resource management systems to secure specialized global human resources and expanding global cooperation systems to enhance external credibility.