Meritz Financial (138040) Q3 2024 earnings summary

Executive summary

• Consolidated net profit for 3Q24 reached KRW656bn, up 13.1% year-over-year, driven by gains from financial instruments and reversal of loan loss provisions.

• Year-to-date consolidated net profit was KRW1.98tn, a 12.7% increase year-over-year, despite weaker interest and commission income.

• Total assets grew to KRW112tn, up 9.5% year-to-date, with shareholder equity rising 6.2% to KRW10.7tn.

Financial highlights

• EPS for 3Q24 was 10,379 won, up 14.2% year-over-year; BPS rose 3.8% to 53,457 won.

• ROE improved to 26.8% (down 4.4 percentage points YoY), and ROA increased to 2.5% (up 0.3 percentage points YoY).

• Insurance income grew 13.1% YoY YTD, while net interest income was flat and commission income declined.

• Operating profit for 3Q24 was KRW902bn, up 11% YoY; YTD operating profit rose 13%.

Outlook and guidance

• Shareholder return policy continues to focus on share buybacks and cancellation, with a forward PER of 7.5x and share buyback yield of 13.3% as of September 2024.

• The company aims to return 50% of consolidated net income over three years starting FY2023.