Banks see weak profits in Q2 over earlier quarter

Korean lenders saw their earnings slump 33.3 percent in the second quarter from three months earlier due mainly to decreased non-interest income and a rise in loan-loss reserves, the financial watchdog said yesterday.

The combined net income of 18 local banks came to 2.2 trillion won ($1.94 billion) in the April-June period, compared with 3.3 trillion won in the previous quarter, according to the Financial Supervisory Service.

Compared with a year earlier, banks’ earnings also plunged 60.4 percent from 5.5 trillion won, largely because there was no one-off profit gain such as a stake sale, the FSS said.

Last year, seven local lenders, including top player Kookmin Bank, sold their stakes worth 3.2 trillion won in Hyundai Construction & Engineering, boosting their overall profit. The profit drop came on the heels of a decline in non-interest income, which fell 1.5 trillion won on-quarter to 700 billion won. Yonhap