Local banks suffer from declining net income in Q1

Korean banks saw their net income decline sharply while their gross income rose slightly in the first quarter from a year earlier, the country’s financial watchdog said yesterday.

The combined net profit of local banks was an estimated 3.5 trillion won ($3.1 billion) for the January to March period, down 1 trillion won from a year earlier but up 4.1 trillion won from the previous quarter, according to the Financial Supervisory Service. Their gross income, however, increased by around 100 billion won to 12 trillion won.

Lenders’ interest income reached 9.7 trillion won during the period, unchanged from a year earlier, while their noninterest income edged down to 2.2 trillion won from 2.3 trillion won. Banks’ loan-loss reserves amounted to 2.4 trillion won for the first quarter, up 700 billion won from the previous year.

Their return on equity, or the rate of return on ownership interest, came to 10.28 percent for the first quarter, down 2.89 percentage points from a year earlier.

Yonhap