The South Korea Financial Supervisory Service published preliminary first-half 2026 results for savings banks and mutual financial cooperatives. Savings banks’ net income rose by KRW 508.8 billion from a year earlier to KRW 765.8 billion, supported by higher securities-related income and lower bad debt expenses. Mutual financial cooperatives’ net income increased 71% to KRW 714.1 billion, mainly reflecting stronger earnings from credit operations. Asset quality trends were mixed. Savings banks’ delinquency rate rose 0.22 percentage points from end-2025 to 6.26%, driven by business loans, although their substandard-or-below loan ratio fell to 8.16%. Mutual financial cooperatives’ delinquency rate increased 0.77 percentage points to 5.39%, while their substandard-or-below loan ratio climbed to 6.06%. Nonperforming loan coverage declined to 107.9% for savings banks and 109.1% for cooperatives, while their respective capital ratios stood at 15.73% and 8.02%. The Financial Supervisory Service will continue encouraging both sectors to resolve substandard-or-below loans, build sufficient provisions and strengthen loss-absorbing capacity.
2026-08-28South Korea Financial Supervisory Service
South Korea's Financial Supervisory Service reports higher first-half earnings at savings banks and mutual financial cooperatives despite rising delinquencies
Preliminary first-half 2026 net income rose to KRW 765.8 billion at savings banks and KRW 714.1 billion at mutual financial cooperatives. Delinquency rates increased in both sectors, while nonperforming loan coverage declined. The Financial Supervisory Service will encourage further resolution of weaker loans and sufficient provisioning.