[Digital Today reporter Lee Ji-young] SC First Bank's consolidated net profit for the first half of this year rose more than twofold from a year earlier to 424.4 billion won. Non-interest income jumped on strength in wealth management and foreign exchange derivatives, and the reversal of provisions related to fines over Hong Kong H-index equity-linked securities (ELS) was also reflected in results.

SC First Bank said on Thursday its first-half consolidated net profit rose 103 percent from a year earlier to 424.4 billion won, up 215.8 billion won from 208.6 billion won. Operating profit rose 59 percent to 408.2 billion won, up 151.8 billion won from 256.4 billion won a year earlier.

The rise in net profit was driven by improved business performance, provision management and the partial reversal of 110.2 billion won in provisions related to fines over Hong Kong H-index ELS.

Net interest income came to 609.0 billion won, little changed from 609.8 billion won a year earlier. Customer loans rose, but net interest margin (NIM) fell 0.24 percentage points to 1.24 percent from 1.48 percent.

Non-interest income rose 78 percent to 365.6 billion won, up 159.6 billion won from 206.0 billion won a year earlier. Results improved in wealth management on an increase in high net worth clients and a stronger stock market, and gains also rose in the foreign exchange derivatives business.

Selling and administrative expenses rose 8 percent to 493.0 billion won, up 35.6 billion won from a year earlier, due to wage and price rises. Cost savings from a special retirement programme carried out at the end of last year partly offset the increase. Total expected credit losses and other provisions fell 28 percent to 73.4 billion won, down 28.5 billion won from 101.9 billion won a year earlier.

In the second quarter alone, consolidated net profit rose 230.5 percent from a year earlier to 319.6 billion won, compared with 96.7 billion won in the second quarter of last year. Operating profit rose 126.9 percent to 271.8 billion won, and non-interest income increased 116.7 percent to 255.5 billion won.

As of end-June, total loans stood at 44.77 trillion won, up 3.6 percent from 43.22 trillion won a year earlier. The rise reflected higher funding demand from corporate finance customers. Return on assets (ROA) rose 0.28 percentage points to 0.74 percent, while return on equity (ROE) increased 7.82 percentage points to 15.43 percent.

Some soundness indicators deteriorated. The ratio of substandard or lower loans rose 0.22 percentage points to 0.71 percent at end-June from 0.49 percent a year earlier, and the delinquency ratio increased 0.03 percentage points to 0.45 percent from 0.42 percent. The loan loss reserve ratio fell to 118.75 percent from 181.41 percent over the same period.

Capital ratios also fell from a year earlier but remained above regulatory requirements. As of end-June, the Bank for International Settlements (BIS) total capital ratio was 17.77 percent and the common equity tier 1 (CET1) ratio was 15.65 percent, down 3.58 percentage points and 2.47 percentage points, respectively, from a year earlier.