South Korean banks posted more than 8 trillion won ($7.1 billion) in combined net profit in the first six months, 1.7 times higher than a year ago due to a sharp decrease in loan loss provisions, data showed on Tuesday.
According to the data released by the Financial Supervisory Service, the combined net profit of 17 Korean commercial and state lenders amounted to 8.1 trillion won, up by 5.1 trillion won from a year earlier.
Both interest and non-interest income grew evenly, with interest income up by 1.1 trillion won to 18 trillion won and non-interest income up by 1.3 trillion won to 4.5 trillion won.
K-IFRS net profit is calculated by excluding SG&A expenses, loan loss provisions, non-operating and tax expenses from gross profit (interest and non-interest income).
Loan loss provisions shrank from 8.4 trillion won to 2.7 trillion won in the cited period.
State banks that suffered most from bad loans extended to shipbuilding and other vulnerable industries reported a dramatic turnaround to a 2.9 trillion won profit from a 1 trillion won loss at the end of June last year.
Net profit of nationwide banks rose from 3.4 trillion won to 4.6 trillion won and that of regional banks maintained at 600 billion won.
The return on assets (ROA), a key measure for a bank’s profitability, averaged 0.71 percent, while the return on equity (ROE) was 8.98 percent, up 0.44 percentage point and 5.55 percentage points, respectively, from a year ago.
By Chung Seok-woo
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