SEOUL, South Korea--(BUSINESS WIRE)--JB Financial Group (KRX:175330) reported first quarter 2018 consolidated net income of KRW88.1 billion, up by 24.8% compared to previous year. In terms of controlling interest net income, the Group reported KRW64.2 billion, up by 36.0% year-on-year, continuing its rapid earnings growth.
Despite few large provision items found in the first quarter, profitability improved quite significantly thanks to the prudent growth focusing on risk-return profile and asset quality maintaining its healthy trend. While each of the affiliates enjoyed sound income growth, Jeonbuk Bank recorded KRW24.9 billion net income which hit a year-on-year growth of 172.5%. Kwangju Bank and JB Woori Capital also posted strong net incomes of KRW45.1 billion (up 5.3% YoY) and KRW20.1 billion (up 8.8% YoY), respectively.
The remarkable results of JB Financial Group was mainly attributed by strong rise in net interest margin (NIM), backed by the banks’ efforts to maximize their interest rate sensitivity by rebalancing its asset-liability portfolio in order to prepare for the interest rate hike cycle. Non-interest income also showed healthy improvement compared to the last year. On the other hand, the Group’s return on risk weighted assets (RoRWA) continues to improve, which in turn, the Group’s capital adequacy ratio is improving.
In first quarter 2018, Group NIM rose by 6bps quarter-on-quarter and 20bps year-on-year, reaching 2.58% (2.35% for banks). Cost-income ratio is improving at 47.4%. The Group’s asset quality indicators, delinquency rate and substandard & below ratio were both down by 7bps, recording 0.90% and 0.97% Meanwhile, credit cost ratio maintained healthy level of 0.45%. As a result, JB Financial Group’s ROA and ROE reached 0.75% and 11.55%.
Chief Financial Officer Jae-Yong Lee said in the earnings call, “Asset portfolio rebalancing focusing on risk-return profile and active risk management resulted in the Group’s overall improvement in profitability. We will further continue to strengthen our competitiveness in finance industry by reinforcing our ‘digital finance’ strategy.”
The 1Q2018 business result materials are available on English page of www.jbfg.com, under Investor Relations, Business Result.