South Korean savings banks reported record-high net profits in the first nine months of this year as self-employed and individuals turned to them on tighter mortgage-backed loan regulations on primary banks, data showed Thursday.

According to the Financial Supervisory Service, the combined net profit of 79 savings banks in the January-September period was 937.4 billion won ($787.2 million), up 10.3 percent from the same period a year earlier. It is the highest amount for the cited period.

The surge in net profit was attributed mainly to a rise in interest income as banks expanded loans amid increase in total assets.

Total assets of savings banks amounted to 74.2 trillion won as of end of September, up 6.7 percent from the end of December, last year. The total amount of loans extended by the banks was 62.6 trillion won, up 5.8 percent during the same period.

Interest income jumped 6.9 percent on-year to 3.3 trillion won in the January-September period, data showed.

Indices that measure overall soundness of the savings banks improved but loan delinquency ratio of individual businesses rose.

Loan delinquency ratio came to 4.2 percent as of end of September, down 0.1 percentage point from the end of December, last year, and down 0.4 percentage points from the end of September, last year.

The ratio for corporate loans was 4.6 percent, up 0.4 percentage points from the end of December, and that for individual business loans, 4.8 percent, up from 4 percent during the same period.

Loan delinquency ratio, meanwhile, for household loans, came down 0.7 percentage point on year to 3.9 percent.

Data showed that non-performing loan ratio of savings banks reached 5.1 percent as of end of September, down 0.1 percentage points from the same period last year.

Savings banks’ Bank for International Settlements (BIS) capital adequacy ratio reached 15.08 percent as of end of September, up 0.75 percentage points from December.

The FSS said that it plans to thoroughly monitor conditions of savings banks’ financial soundness and operations to counter potential risk amid growing economic uncertainty at home and abroad. The FSS, in particular, noted that it will advise savings banks to enhance risk management over self-employed and individual loans.

By Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]