In Support of Farmers and Fishermen

Nonghyup to expand its credit business to increase support to its members

The National Agricultural Cooperatives Federation(Nonghyup) has a flourishing credit business sector good enough to be compared to those of commercial banks. It has a long-term vision to be ranked within the 60th largest bank in the world by 2010.
Nonghyup's credit business sector recorded a net profit of 864.1 billion won last year, up 11.5 billion won or 1.3 percent from the preceding year. This year, targeted net profit is set at 880.8 billion won. Its assets totaled 140 trillion won at the end of last year, up 11 trillion won from the previous year, ranked the second largest in the banking community. It plans to increase its assets to 155 trillion won this year. Nonghyup's credit sector ranked the 95th in terms of assets in the world banking industry according to Banker, a financial magazine.
The NACF's banking sector saw its deposits grow to 100 trillion won last year, up 7 percent from 2004 and this year it is expected to increase to 114 trillion won. The household deposits grew 12.5 percent or 4.17 trillion won last year to build a base for retail financing with the number of its private banking sector accounts rising to 623,000, up 84,000, or 15.5 percent last year. A total of 1,812 companies with 45,906 employees took out subscriptions for Nonghyup's retirement fund.
In the area of credit extension, the credit business sector released 80 trillion won in loans last year, up 14.6 percent from the preceding year. It has reorganized its credit department to boost professionalism, divided into credit, credit analysis, investment financing and corporate financing, among others. The move is aimed at diversification of its asset management by firing up the investment financing section. The section will deal with SOC investment, real estate investment, and international investment, among others, to boost income. The project financing expanded by 90 percent from 2004 to 3.115,5 trillion won with international investment up to 1.47 billion, up 26.8 percent from the previous year. Investments in private equity funds amounted to 72.5 billion won, up 110.8 percent.
In the insurance sector, premium income rose 14.1 percent to 6.55 trillion won to rank the 4th in the life insurance industry and for this year, the target is set at 7 trillion won. A special insurance product was developed for the benefit of farmers around the country. Life insurance products also included those for accidents, damage or death and others to expand the choice for the farmers.
Nonghyup provided 16 emergency rescue vehicles to 119 emergency rescue brigades in 16 locations around the country last year. It also drew up regulations to make the system more transparent in the areas of sound finance, and transparency to the level of the civilian insurance industry.
In the sector of credit card, the Nonghyup credit card operation is ranked 5th in the credit card industry and tops among member card companies belong to BC card in terms of membership and use amount. The number of cardholders increased to 5,892,000 last year, up 16.1 percent from the preceding year and this year, the target is set at 7 million. The serviced amount reached 3.119 billion won, up 9.4 percent from the preceding year. A number of special credit card products suitable for farmers and farm towns will be developed and marketed.
In the sector of mutual finance, the business turnover reached 216 trillion won, rising 11 percent from 2004 and the top in the secondary financial sector. This year, the target has been set at 240 trillion won including 140 trillion won in deposits and 100 trillion won in loans.
Many changes are expected in the banking industry this year and Nonghyup is prepared to face them and overcome them through various changes in its systems and policies. There will be banks born out of integration and mergers and acquisitions. The financial sector is expected to go through reorganization when the capital market integration law is established. The sector will be comprised of banking, insurance and securities industries after the law is enforced. Nonghyup's credit business should be expanded and strengthened to provide support to its economic businesses and education assistance business. nw

Chung Yong-keun, president of the Nonghyup Credit and Banking Business