South Korean banks reported a 14.2-percent fall in their combined net profit for the first quarter, hit by investment losses and costs related to job cuts, data showed on May 14.
The combined net profit of banks stood at 3.8 trillion won ($3.2 billion) for the January-March period, compared with a profit of 4.4 trillion won a year ago, the Financial Supervisory Service said in a statement.
“One-off factors, including declining subsidiary-related income, contributed to the domestic banks‘ decreasing net income,” the FSS said.
Preliminary interest income for the first quarter stood at 10.1 trillion won, up 4.4 percent from a year earlier, as the banks continued to enjoy low market rates, it said.
Loan-loss provisions fell 14.3 percent on-year to 700 billion won as restructuring efforts in the sectors of shipbuilding and shipping came to an end, the FSS said.
“The decline was mainly attributable to a decrease in newly delinquent loans and partial reversal of allowance for bad debts,” it said.
The average net interest margin of the banks, a key barometer of profitability, stood at 1.62 percent for the first quarter, down 0.03 percentage point from a year ago.
By Ram Garikipati and newswires (email@example.com)