SBI Savings Bank Turns to Loss in 1Q... Net Loss of 6.4 Billion KRW

The savings bank industry recorded a net loss of over 150 billion won, with SBI Savings Bank, the industry leader, posting a deficit for the first time in about 10 years.

According to SBI Savings Bank on the 31st, the net loss for the first quarter of this year was 6.42857 billion won. This marks a turnaround from a net profit of 3.72199 billion won in the first quarter of last year. SBI Savings Bank cited loan loss provisions as the reason for the deficit. They proactively set aside provisions in preparation for risks such as non-performing assets. The provisions accumulated by SBI Savings Bank in the first quarter of this year amounted to approximately 642.7 billion won, about 40 billion won more than the 600.8 billion won in the first quarter of last year. During the same period, the loan loss provision coverage ratio rose from 4.91% to 5.45%.

Asset quality slightly deteriorated. As of the end of the first quarter this year, the delinquency rate was 5.59%, up 0.68 percentage points from 4.91% 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, increased by 1.78 percentage points from 2.85% at the end of last year to 4.63% at the end of the first quarter this year. The ratio of non-performing loans classified as substandard or below rose by 1.05 percentage points to 6.97%. However, the Basel III (BIS) capital adequacy ratio, which was 15% until last year, was raised to 15.43% in the first quarter of this year.

An SBI Savings Bank official stated, “The temporary deficit occurred because we set aside ample loan loss provisions,” adding, “We have been profitable again since April. We expect to return to profitability in the second quarter.”

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