Savings banks' combined profit gains 3.9 pct in 2018 on interest income

SEOUL, March 19 (Yonhap) -- South Korean savings banks reported a 3.9-percent gain in their combined net profit for last year, supported by a modest rise in interest income, data showed Tuesday.

The combined net income of the 79 savings banks came to 1.11 trillion won (US$981 million) in 2018, compared with a profit of 1.07 trillion won a year earlier, according to the data by the Financial Supervisory Service (FSS).

Their interest income rose 11.8 percent on-year to 4.18 trillion won, while loan-loss provisions gained 11.8 percent on-year to 1.2 trillion won.

Their loan delinquency ratio fell 0.1 percentage point to 5 percent at the end of last year, according to the data.

The average capital adequacy ratio of the savings banks reached 14.36 percent at the end of last year, up 0.05 percentage point from a year ago.

"The growth was mainly due to an increase in shareholders' equity exceeding a rise in risk-weighted assets," the FSS said in a statement.

A key barometer of financial health, the ratio measures the proportion of a bank's total capital to its risk-weighted assets. The Bank for International Settlements (BIS), an international organization of central banks based in Basel, Switzerland, advises lenders to maintain a ratio of 8 percent or higher.

The FSS said it will encourage savings banks to step up efforts to boost their financial health in the face of headwinds at home and abroad, including U.S. rate rises, rising household debt and sluggish recovery in private consumption.

kdh@yna.co.kr
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