Welcome Savings Bank Reports 13.1 Billion KRW Net Profit in 1Q... Real Estate Delinquencies Double

Welcome Savings Bank announced on the 31st that its net profit for the first quarter of this year was 13.05529 billion KRW, a 60.9% increase compared to the same period last year (8.11141 billion KRW).

The increase in net profit was due to cost efficiency efforts. Interest expenses reached 60.9 billion KRW in the first quarter of last year, but as deposit balances shrank, they decreased by 19.1% to 49.3 billion KRW in the first quarter of this year. Selling and administrative expenses were recorded at 26.6 billion KRW, down 14.1%.

As deposit interest rates rise in the banking sector, the balance of savings and fixed deposits is increasing. The secondary financial sector is also consecutively raising fixed deposit interest rates. The photo shows Welcome Savings Bank in Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@

Asset quality deteriorated. As of the end of the first quarter this year, the delinquency rate was 8.07%, up 2.32 percentage points from 5.75% at the end of last year. The delinquency rate related to real estate, including real estate project financing (PF) loans, construction, and real estate businesses, soared nearly twofold from 8.62% at the end of last year to 16.47% at the end of the first quarter this year. The ratio of non-performing loans classified as substandard or below rose by 1.87 percentage points to 9.64%. However, the Basel III (BIS) capital adequacy ratio was raised from 14.87% last year to 15.24% in the first quarter of this year.

A representative of Welcome Savings Bank stated, “As a result of preparing for market uncertainties and risks and focusing on management efficiency, we have achieved consecutive profits,” adding, “We plan to focus on minimizing risks and establishing a growth foundation through continuous asset quality management.”

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