South Korean banks' income falls by 13.9% to $4.43b in Q3 2024

Return on assets stood at 0.65%.

Korean banks reported a preliminary net income of $4.43b (KRW 6.2t) in the third quarter, down by 13.9% from $5.15b (KRW7.2t) in the previous quarter.

National banks' net income rose to $429.52m (KRW600b) during the quarter, regional banks recorded $286.34m (KRW400b), and internet-only banks posted $143.17m (KRW200b). Meanwhile, specialised banks saw a significant decline in net income, down $1.14b (KRW1.6t) quarter-on-quarter.

Return on assets (ROA) stood at 0.65%, whilst return on equity (ROE) fell to 8.55%, down 1.83 percentage points. In contrast, commercial banks experienced growth in ROA (0.78%) and ROE (11.66%).

Interest income for domestic banks dropped 1.9% to $10.45b (KRW14.6t). Interest-bearing assets increased, however, a decrease in loan-deposit margins, shrank net interest margin.

Non-interest income surged by 50.9% to $1.64b (KRW 2.3t), up by $572.69m (KRW 800b). Securities income and foreign exchange derivatives income rose by $572.69m (KRW 800b) and $214.76m (KRW300b), respectively.

Loan loss expenses expanded to $1.43b (KRW 2t), with specialised banks driving the increase due to reversing allowances for doubtful accounts in the second quarter.

The Financial Supervisory Service has called on domestic banks to strengthen their loss-absorbing capacities to maintain resilience amidst potential crises.

$1 = KRW1,397