SEOUL, March 14 (AJP) - South Korean banks posted a record net profit of 22.4 trillion won ($16.5 billion) in 2024, a 5.5 percent increase from the previous year, according to data released on Friday by the Financial Supervisory Service (FSS).
The regulator attributed the profit surge to a 3.1 trillion won reduction in loan-loss provisions, which offset expanded operating losses, including 1.4 trillion won in compensation costs tied to equity-linked securities. Interest income rose slightly to 59.3 trillion won, but the pace of growth slowed significantly to 0.2 percent from 5.8 percent the previous year.
Non-interest income climbed 2.9 percent to 6 trillion won, buoyed by increased securities-related gains as market interest rates declined. On the expense side, selling and administrative costs rose 3.2 percent to 27.4 trillion won, while loan-loss provisions fell sharply by 30.9 percent to 6.9 trillion won.
Despite the record earnings, key profitability metrics showed mixed results.
Return on assets (ROA) remained unchanged at 0.58 percent, while return on equity (ROE) dipped slightly by 0.08 percentage points to 7.80 percent.
The FSS cautioned that growing domestic and international uncertainties — ranging from heightened U.S. protectionism to concerns over expanding credit risks in vulnerable sectors — pose challenges ahead.
"As these risks intensify, we will continue to encourage banks to secure sufficient loss absorption capacity to ensure stable financial intermediation, even in times of economic distress," the agency said in a statement.
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