A citizen passes by a row of ATM machines in Seoul. (Yonhap)
Four financial holding firms in South Korea saw their interest income surge nearly 15 percent in 2021 thanks to rising lending rates, industry data showed Monday.
The combined interest income of the four holding companies -- KB Financial Group Inc., Shinhan Financial Group Co., Hana Financial Group Inc. and Woori Financial Group Inc. -- came to some 32.3 trillion won ($26.9 billion) last year, up 14.9 percent from a year earlier.
KB Financial led the pack with an interest income of slightly over 11.2 trillion won, which was up 15.5 percent from the prior year.
Hana Financial came next with some 7.4 trillion won, followed by Woori Financial with over 6.9 trillion won and Shinhan Financial with about 6.6 trillion won.
The jump in interest income was attributed to a rising spread between lending and deposit rates in the wake of key rate hikes. In December, the gap stood at 2.19 percentage points, higher than 2.05 percentage points a year earlier.
The financial group's average net interest margin (NIM) of the banks, a key barometer of profitability, thus expanded around 0.1 percentage point over the past year.
In mid-January, the central Bank of Korea (BOK) raised the country's policy rate by a quarter percentage point to 1.25 percent, the third rate increase since August.
The BOK has stressed the need to "normalize" interest rates kept low to keep the pandemic-hit economy going, citing growing concerns over inflation and household debt. (Yonhap)
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