À̹ÌÁö È®´ë South Korean banks delivered their best January-September earnings in 11 years, benefiting from interest premium from higher market yields tracking offshore interest rate rises, data showed Wednesday.
According to data by the Financial Supervisory Service, the combined net profit of local banks in the January-September period reached 12.4 trillion won ($10.9 billion), the highest since 13.1 trillion won recorded during the same period in 2007. The combined figure is also higher than last year¡¯s 11.2 trillion won when lenders enjoyed a bumper year.
The combined net profit at banks stood at 4.4 trillion won in the first quarter, 3.9 trillion won in the second quarter, and 4.1 trillion won in the third quarter. The July-September figure is a record high for the quarter.
Industry analysts noted that net profit at banks tend to go up in the first quarter and down in the year-end season. This year, however, their net profit for the third quarter was higher than the previous quarter.
The return on assets (ROA), a key measure for banks¡¯ profitability, rose 0.11 percentage points to 0.65 percent in the third quarter from a year ago and return on equity (ROE) up 1.52 percentage points to 8.26 percent during the same period.
Banks¡¯ improved profitability is attributed to a rise in interest income and reduced costs for bad debt.
In the July-September period, banks raised record 10.2 trillion won in combined interest income after surpassing the 10 trillion won mark for the first time in the second quarter. Banks profit when interest rates move up as loan rates rise faster than deposit rates. Net interest margin slightly fell but assets under management such as loans increased.
By Lee Seung-yoon and Lee Eun-joo
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]