South Korean domestic banks’ net income shrank 24.1% in Q1

Non-interest and non-operating income dragged down income.

South Korean domestic banks’ net income fell by 24.1% in Q1, weighed down by non-interest income and non-operating income declining.

Interest income grew 1.6% to KRW14.9t year-on-year, according to data from the Financial Supervisory Service (FSS). 

Interest-bearing assets rose by 3.3%, but net interest margin fell by 0.05 percentage points (pp). 

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Non-interest income fell by 19.3% to KRW1.7t in Q1, from KRW2.1t in Q1 2023. Securities-related incomes dropped to KRW0.9t from KRW1.9t a year earlier as market interest rates have risen.

Aggregate loan losses shrank 43.6% to KRW1.1t.

Return on assets (ROA) stood at 0.57%, which is 0.22 pp lower than in Q1 2023. Return on equity also dropped to 7.79%, down from 3.26 pp from 11.05% a year earlier.