South Korean savings banks and mutual finance unions report rising profits

South Korean savings banks and mutual finance unions reported significant increases in net profits for the first half of the year. Savings banks recorded a net profit of 765.8 billion won, the highest in four years, driven by increased profits from securities and reduced credit costs. Total assets for savings banks rose to 120.6 trillion won.

Mutual finance unions, including credit unions, Nonghyup, Suhyup, and Forest cooperatives, saw net profits rise to 714.1 billion won, a 71% increase compared to the same period last year. This growth was largely attributed to expanded interest income.

Despite the rise in profitability, delinquency rates for both sectors increased, primarily driven by corporate loans. The savings bank delinquency rate rose to 6.26%, while the mutual finance delinquency rate reached 5.39%. The Financial Supervisory Service noted that while loss absorption capabilities remain adequate, they will continue to monitor financial soundness and encourage the management of non-performing assets due to economic uncertainties.