Banks log record interest income through Sept. on rising rates

SEOUL– Banks in South Korea earned record net interest income in the first three quarters of the year, helped by sharp rate hikes by the central bank, data showed Thursday.

Their interest revenue in the January-September period stood at a combined 40.6 trillion won (US$30.3 billion), up 6.9 trillion won from a year ago, according to the data compiled by the Financial Supervisory Service (FSS).

Their soaring interest income came as the Bank of Korea has raised its policy rate to combat rising inflation.

The BOK has hiked its key policy rate eight times by a combined 2.5 percentage points since August last year to tame the rising inflation, which prodded local banks to raise lending rates.
Their combined net profit, however, declined in the first nine months of the year as state-run lenders suffered a decline in their net profits while commercial lenders racked up a record high.

Their combined net profit reached 15 trillion won in the first nine months of the year, with commercial banks logging 10.5 trillion won in net profit, up 1.2 trillion won from a year earlier.

Their non-interest income fell 4.5 trillion won to 1.7 trillion won over the cited period due to a decline in investment gains and commission fees.

Their loan-loss costs also increased 1.7 trillion won to 4.1 trillion won over the cited period, according to the data.

Source: Yonhap News Agency

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