South Korean banks report 13.8 trillion won net profit in H1

South Korean banks reported a net profit of 13.8 trillion won for the first half of the year, representing a 6.4% decrease compared to the 14.7 trillion won earned during the same period last year. According to data from the Financial Supervisory Service, this decline was primarily driven by a significant 43.4% drop in non-interest income, which fell to 2.9 trillion won from 5.2 trillion won.

While interest income reached a record high of 32.2 trillion won—an 8.3% increase due to rising interest-bearing assets and net interest margins—this was offset by losses in securities. Specifically, profits related to marketable securities fell by 5.7 trillion won as rising market interest rates led to valuation losses on existing bond holdings.

Profitability metrics also saw a decline, with Return on Assets (ROA) dropping to 0.65% and Return on Equity (ROE) falling to 8.89%. Additionally, credit costs rose by 8.6% to 3.5 trillion won as banks increased provisions for potential loan defaults. The Financial Supervisory Service noted that uncertainties regarding geopolitical risks and interest rate forecasts continue to pose challenges to banking sector stability.