Domestic Banks' Net Profit Last Year 14.4 Trillion Won... 7.7% Decrease Compared to Previous Year

[Asia Economy Reporter Kim Hyo-jin] Last year, the net income of domestic banks in South Korea amounted to 14.4 trillion won, a 7.7% decrease compared to the previous year (15.6 trillion won).

Although interest income, which had driven bank performance, remained at the usual level, the decline is attributed to losses from investments in subsidiaries.

According to the preliminary operating results of domestic banks announced by the Financial Supervisory Service on the 5th, commercial banks recorded a net income of 9 trillion won, regional banks 1.1 trillion won, and special banks 4.4 trillion won. The Financial Supervisory Service explained that the decrease in net income was due to increased selling and administrative expenses and losses from investments in subsidiaries.

The return on assets (ROA) was 0.54%, and the return on equity (ROE) was 6.98%, down 0.09 percentage points and 1.05 percentage points respectively from the previous year. Interest income increased by 0.6% to 40.7 trillion won compared to the previous year. This was due to a 6.5% increase in operating assets such as loan receivables, despite a 0.11 percentage point decline in net interest margin (NIM).

The net interest margin fell by 0.11 percentage points from 1.67% in the previous year to 1.56% as the interest rate spread between deposits and loans narrowed. Non-interest income increased by 18.8% year-on-year to 6.6 trillion won.

Loan loss provisions decreased by 14.3% year-on-year to 3.7 trillion won due to reversals of provisions for some companies. Selling and administrative expenses rose 3.6% year-on-year to 23.7 trillion won, while corporate tax expenses decreased by 1.5% to 5 trillion won.

This content was produced with the assistance of AI translation services.