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Banks' Q1 net up 24 pct on higher interest income

June 2, 2023 - 19:49 By Yonhap

South Korean banks saw their first-quarter net profit rise 24 percent from a year earlier on higher interest and non-interest income, preliminary data showed Friday.

Their combined net profit came to 7 trillion won ($5.4 billion) in the January-March period, up from 5.6 trillion won tallied a year ago, according to data from the Financial Supervisory Service. The figure was up 55.9 percent from 4.5 trillion won three months ago.

Local banks' interest income totaled 14.7 trillion won in the first three months of this year, up from 12.6 trillion won a year ago but down from 15.4 trillion won the previous quarter.

Their non-interest income was tallied at 2.1 trillion won, up from 1.3 trillion won a year earlier and 1.8 trillion won in the fourth quarter of last year.

According to the FSS, the banks' return on assets, a key gauge of profitability, had stood at 0.78 percent as of end-March, up 0.1 percentage point on-year, with return on equity at 10.91 percent, up 1.58 percentage points on-year.

Domestic banks' loan-loss expenses stood at 1.7 trillion won in the first quarter, up from 800 billion won a year ago but down from 2.4 trillion won three months ago.

The FSS called on the banks to secure enough loss-absorbing capacity in the face of persistent uncertainties stemming from tightening policy in South Korea and other countries.