Last Year Savings Banks' Net Profit 1.27 Trillion Won, Up 15% YoY... "Potential Risks Including COVID-19"

[Asia Economy Reporter Kim Hyo-jin] The Financial Supervisory Service announced on the 23rd that the net income of 79 domestic savings banks at the end of last year was 1.2723 trillion won, an increase of 163.9 billion won (14.8%) compared to the end of 2018 (1.1084 trillion won). The increase in interest income by 277.6 billion won due to loan expansion led to the rise in net profit.

At the end of last year, the total assets of savings banks amounted to 77.1 trillion won, up 7.6 trillion won (11.0%) compared to the end of the previous year (69.5 trillion won). Total loans reached 65 trillion won, an increase of 5.9 trillion won (10.0%) compared to the end of 2018 (59.1 trillion won).

Equity capital was recorded at 9 trillion won, up 1.3 trillion won (16.1%) compared to the end of the previous year (7.8 trillion won). This was influenced by an increase in retained earnings of 1.2723 trillion won and a paid-in capital increase of 142.7 billion won.

At the end of last year, the savings banks’ BIS (Bank for International Settlements) capital adequacy ratio was 14.89%, up 0.57 percentage points from 14.32% at the end of the previous year, maintaining a level higher than the regulatory ratio. This was the result of the capital growth rate (15.9%) due to increased net income exceeding the risk-weighted asset growth rate (11.5%).

The delinquency rate at the end of last year was 3.7%, down 0.6 percentage points from 4.3% at the end of the previous year. The Financial Supervisory Service explained that this was due to a combination of factors such as an increase in loan receivables balance and a decrease in delinquent loans due to the sale and write-off of non-performing loans.

The corporate loan delinquency rate was 3.9%, down 0.3 percentage points from 4.2% at the end of the previous year, and the household loan delinquency rate was 3.6%, down 1.0 percentage point from 4.2% at the end of the previous year.

A Financial Supervisory Service official said, "The increase in total assets and total loans of savings banks continues, and net income is also favorable," but added, "Due to recent low growth and the COVID-19 situation, there is a possibility that latent risks such as rising delinquency rates may materialize, so we plan to closely monitor business and soundness conditions."

The official also said, "We will actively promote rationalization of loan interest rates, activation of mid-interest rate loans, and proactive debt restructuring to alleviate the financial burden of vulnerable borrowers."

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