South Korean savings banks see net profit triple in H1

The net profit of South Korea’s top 20 savings banks surged more than threefold in the first half of this year, reaching 574.6 billion won compared to 180.6 billion won during the same period last year. This 218% increase was driven primarily by large institutions, with OK Savings Bank and Korea Investment Savings Bank accounting for 66.4% of the total industry profit.

While profits rose due to diversified revenue streams such as securities investment and reduced provisioning burdens, core lending activities remained stagnant. Total loan balances for the top 20 banks grew by only 0.3% year-on-year. Financial authorities are attempting to encourage lending through middle-interest loan incentives, but banks remain cautious due to concerns over delinquency rates and asset quality.

The average liquidity ratio for the top 20 banks fell to 129.18%, down from 165.48% last year. Industry experts view this decline as a normalization process following the high liquidity levels maintained after the Legoland crisis, rather than a sign of worsening stability. The ratio remains above the Financial Supervisory Service’s regulatory threshold of 100%.