[THE INVESTOR] Seventy-three credit-specialized finance firms in South Korea, excluding credit card companies, saw their net profits jump more than 25 percent on-year in the first half of this year, official data showed on Sept. 27.

Their aggregate net profits amounted to 959.7 billion won (US$866 million) during the six months, up 25.8 percent from a year earlier, according to the Financial Supervisory Service.

It’s mainly attributable to a reduction in delinquency rates and a key interest rate cut that led to a fall in funding costs, added the state financial watchdog.

The combined assets of those firms also climbed 15.6 percent to 112.7 trillion won from a year earlier.

“In general, the profitability and soundness of those credit-specialized finance companies are decent,” the FSS said.

But the authorities will guide them to strengthen risk management in case of a hike in interest rates and also continue to support their efforts to expand overseas and other businesses in order to diversify profit sources, it added.

(theinvestor@heraldcorp.com)