Domestic Banks' H1 Interest Income Hits Record High of 32 Trillion Won, Though Net Profit Drops

South Korean banks' interest income for the first half of this year exceeded 32 trillion won, marking the highest figure ever for a half-year period.

However, net profit declined slightly as non-interest income decreased due to the impact of rising interest rates.

According to the "H1 2026 Business Performance of Domestic Banks" released by the Financial Supervisory Service today (August 23), the net profit of domestic banks in the first half of this year stood at 13.8 trillion won, down 900 billion won (6.4%) from 14.7 trillion won in the same period last year.

Interest income rose by 2.5 trillion won (8.3%) to 32.2 trillion won, compared to 29.7 trillion won in the same period last year.

Interest-earning assets increased by 6.4% to 3,628.1 trillion won, and the net interest margin (NIM) also rose by 0.04 percentage points.

On the other hand, non-interest income plummeted by 2.3 trillion won (43.4%) to 2.9 trillion won, compared to 5.2 trillion won in the same period last year.

While fee income, trust-related income, and foreign exchange and derivatives-related income increased, securities-related income dropped significantly due to the impact of rising market interest rates.

Securities-related income swung from a surplus of 3.2 trillion won last year to a deficit of 2.5 trillion won this year.

Selling, general, and administrative expenses increased by 700 billion won (5.4%) to 14.4 trillion won.

Provision for credit losses increased by 300 billion won (8.6%) to 3.5 trillion won.

The Financial Supervisory Service explained, "Uncertainty is growing due to the prolonged geopolitical risks stemming from the Middle East, U.S. tariff policies, and expanding prospects for benchmark interest rate hikes, while the upward trend in delinquency rates continues, posing soundness burden factors."

It added, "We plan to strengthen monitoring centered on vulnerable sectors and induce the expansion of loss-absorbing capacity, such as building up loan-loss reserves."

(Photo: Yonhap NewsTV screen capture, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.