The South Korea Financial Supervisory Service reported that domestic banks’ preliminary net income fell 6.4% year over year to KRW 13.8 trillion in the first half of 2026. Return on assets declined to 0.65% from 0.74%, while return on equity fell to 8.89% from 10.04%. Commercial and specialized banks recorded lower net income overall, although internet-only banks posted an increase. Interest income rose 8.3% to KRW 32.2 trillion as interest-bearing assets expanded and net interest margin increased to 1.56%. This was outweighed by a 43.4% drop in non-interest income to KRW 2.9 trillion, driven by securities valuation losses amid higher market interest rates. Selling, general and administrative expenses increased 5.4% to KRW 14.4 trillion, while loan-loss expenses rose 8.6% to KRW 3.5 trillion. The Financial Supervisory Service will closely monitor domestic banks’ financial stability and guide them to strengthen loss-absorbing capacity amid increased domestic and international uncertainty. The preliminary figures cover 20 domestic banks and are based on their separate financial statements.
2026-08-24South Korea Financial Supervisory Service
South Korea Financial Supervisory Service reports 6.4% fall in banks’ first-half net income to KRW 13.8 trillion
The South Korea Financial Supervisory Service reported a 6.4% year-over-year decline in domestic banks’ preliminary first-half net income to KRW 13.8 trillion. Higher interest income was outweighed by weaker non-interest income, securities valuation losses and increased expenses. The regulator will monitor financial stability and guide banks to strengthen loss-absorbing capacity.