Due to Prolonged High Interest Rates... Big Four Banks' Interest Income Surpasses 40 Trillion Won for the First Time

The counter of a commercial bank [Image source=Yonhap News]

Last year, amid a high interest rate environment, the annual interest income of the four major financial holding companies surpassed 40 trillion won for the first time ever.

According to the financial sector on the 10th, the combined annual net income of the four major financial holding companies (KB Kookmin, Shinhan, Hana, and Woori) was 14.9682 trillion won, a 4.5% decrease compared to the previous year.

Although record-high performance was initially expected, net income declined due to participation in banking sector livelihood financial support measures and an increase in provisions for loan losses.

However, both core revenue sources, interest income and non-interest income, increased.

Last year, the total interest income of the four major financial holding companies was 40.6553 trillion won, up 1.9% from the previous year. This is the first time their interest income has exceeded 40 trillion won.

With increases in household and corporate loans, the direct benefits of prolonged high interest rates became evident.

Non-interest income also surged by 48% year-on-year to a total of 10.5187 trillion won. This high profit is interpreted as a result of changes in fee structures and recovering past losses from stock investments, among other factors.

While the financial holding companies achieved massive profits, the delinquency rates of borrowers in the banking sector worsened.

The loan delinquency rate of the four major banks rose by 0.05 percentage points (p) from an average of 0.20% at the end of 2022 to 0.25% at the end of last year. The delinquency rate for small and medium-sized enterprises increased from an average of 0.24% to 0.29%.

In most banks, the construction industry showed the highest delinquency rate among sectors, which is attributed to the downturn in the real estate market.

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