NongHyup Financial Group Inc. aims to post more than 1 trillion won ($916.5 million) in profits this year, but a potential rise in loan-loss reserves and bad debt may squeeze the group’s bottom line, its chief said Monday.
“The group plans to spend this year beefing up its competitiveness in a bid to prepare for a ‘take-off’ in 2014,” Shin Dong-kyu, the president of the group, told a press conference marking the one-year anniversary of the group’s establishment.
NongHyup Financial Group was launched on March 2, 2012 with seven affiliates, including the banking unit, under its wing.
NongHyup, or the National Agricultural Cooperatives Federation, underwent a major reshuffle as it was separated into the agro-focused holding company and the financial group.
Shin said that the group is seeking to post net profit of around 1.06 trillion won for this year, larger than an estimated profit of 360 billion won recorded for 2012.
The president said that last year’s weaker profit mainly came as the group had to allocate some 700 billion won in expenses including loan-loss reserves at the initial stage of the group’s creation.
“The group’s 2013 profit target is set at more than 1 trillion won. But given tough macroeconomic conditions, a possible rise in bad debt and loan-loss reserves may serve as setbacks,” Shin noted. (Yonhap News)
