Seoul: South Korean banks' combined net profit surged nearly 29 percent in the first quarter compared to the previous year, driven by a base effect, as revealed by recent data.
According to Yonhap News Agency, the Financial Supervisory Service (FSS) reported that the collective net profit of 20 banks reached 6.9 trillion won (US$5.01 billion) in the January-March period, increasing from 5.3 trillion won in the same period last year. This increase is attributed to the absence of significant costs incurred in the past, specifically the 1.8 trillion won spent on compensating for improper sales of equity-linked securities.
The banks' interest income for the first quarter was recorded at 14.8 trillion won, marking a rise of 100 billion won, or 0.8 percent, compared to the previous year. Additionally, non-interest income increased by 100 billion won, or 6.6 percent, reaching 2 trillion won during the same period.
The FSS data also indicated that the banks allocated 1.6 trillion won in loan-loss reserves in the first quarter, which is an increase of 300 billion won, or 24 percent, from the prior year. Furthermore, the banks experienced improvements in their financial ratios, with the return on assets ratio climbing to 0.71 percent from 0.57 percent, and the return on equity ratio rising by 1.75 percentage points to 9.55 percent over the same timeframe.