Savings Banks Surpass 100 Trillion KRW in Assets in H1 Due to Household Loan Growth... Net Profit 1.6 Trillion KRW, Up 66.9% YoY

Total Assets of 102.4376 Trillion KRW... 11.4% Increase YoY
Another Record High Performance in H1... Driving Profit Revenue

[Asia Economy Reporter Kwangho Lee] Domestic savings banks recorded their highest-ever performance in the first half of this year due to increased interest income from loan growth.

According to the "2021 First Half Savings Bank Business Performance (Preliminary)" report released by the Financial Supervisory Service on the 8th, the net income of 79 domestic savings banks reached 1.0618 trillion KRW. This is a 66.9% (425.8 billion KRW) increase compared to the previous record of 636 billion KRW in the first half of last year.

The record-breaking performance was mainly driven by expanded interest income. Interest income in the first half of this year was 3.6093 trillion KRW, up 12.7% (407.4 billion KRW) from 3.2019 trillion KRW in the same period last year.

Non-interest income, including gains related to securities, also turned positive at 79.2 billion KRW, increasing by 272.1 billion KRW compared to -192.5 billion KRW in the same period last year.

The scale of savings banks expanded significantly. Total assets of savings banks in the first half of this year were 102.4376 trillion KRW, an 11.3% (10.4361 trillion KRW) increase compared to 92.0015 trillion KRW at the end of last year.

Household loans and corporate loans increased to 48.9 trillion KRW and 36 trillion KRW, respectively, rising 13.1% (5.7 trillion KRW) and 14.0% (4.4 trillion KRW).

Equity capital (11.5 trillion KRW) also increased by 11.1% (1.2 trillion KRW) compared to the end of last year due to increased retained earnings from net income.

The total loan delinquency rate was 2.7%, down 0.6 percentage points from 3.3% at the end of last year. Compared to the end of last year, the corporate loan delinquency rate in the first half of this year was 2.6%, down 0.8 percentage points, and the household loan delinquency rate was 3.2%, down 0.1 percentage points.

The ratio of non-performing loans classified as substandard or below, an indicator where lower values indicate better loan soundness, was 3.6%, down 0.6 percentage points from 4.2% at the end of last year.

The Basel Committee on Banking Supervision (BIS) capital adequacy ratio was 14.06%, slightly down 0.17 percentage points from 14.23% at the end of last year, but still maintained a level higher than the regulatory requirement.

A Financial Supervisory Service official stated, "Although savings banks show favorable business performance, it is necessary to proactively manage to prevent excessive household loan growth and other expansion policies from becoming potential risks," adding, "We will closely monitor household loan trends and guide strengthened management when necessary to induce stable total household loan control."

He continued, "We also plan to continue implementing preemptive measures to enhance loss absorption capacity, such as strengthening provisions for limit-based loans."

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