The Bank of Korea's Net Profit Last Year Was 5.3 Trillion Won... An Increase of 2.9 Trillion Won from the Previous Year

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] Last year, the Bank of Korea's net profit surged as it gained from overseas investments.

According to the '2019 Annual Report' published by the Bank of Korea on the 31st, the Bank's net profit for the 2019 fiscal year was 5.3131 trillion won, an increase of 2.0994 trillion won compared to the previous year (3.2137 trillion won).

The Bank of Korea cited the expansion of foreign currency securities trading gains due to the decline in international interest rates and the rise in the won-dollar exchange rate as the reasons for the increase in net profit. Total revenue increased by as much as 2.5902 trillion won, and total expenses were reduced by 471.8 billion won as foreign currency securities trading losses decreased.

Of the net profit of 5.3131 trillion won, 30%, or 1.5939 trillion won, was allocated to statutory reserves. Additionally, 33.9 billion won was set aside as discretionary reserves for the purpose of contributing to the Agricultural and Fishery Household Savings Promotion Fund. The remaining 3.6853 trillion won was paid to the government as revenue, the Bank explained.

After the appropriation of the net profit for the 2019 fiscal year, the balance of reserves stands at 14.8054 trillion won.

Looking at the Bank of Korea's foreign currency assets by currency last year, the US dollar accounted for 69.1%, and other currencies made up 30.9%. The proportion of entrusted assets, which have a lower US dollar share compared to directly invested assets, expanded, slightly reducing the US dollar share.

Cash equivalents accounted for 4.6%, direct investment assets 74.6%, and entrusted assets 20.8%. The share of direct investment assets decreased by 1.8 percentage points compared to the previous year, and the share of cash equivalents also decreased by 0.7 percentage points. By product, the proportions were government bonds 44.6%, government agency bonds 15.8%, corporate bonds 13.4%, asset-backed securities 12.5%, and stocks 8.7%.

A Bank of Korea official stated, "In response to increased volatility in financial markets, we expanded the proportion of government bonds, which have the highest safety, and reduced the proportion of non-government bonds," adding, "We also increased the proportion of stocks in response to changes in international financial market trends, such as the expanded preference for risk assets throughout the year."

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