Commercial Banks' 2Q Net Profit Plunges 48% to 1.1 Tril. Won

SEOUL, KOREA- The second-quarter net profit for 18 commercial banks in Korea has shrunk to 1.1 trillion won, almost a half of that a year ago. That was largely due to a fall in net interest margin, a measure of the difference between the interest income generated by banks and the amount of interest paid out to their lenders, and a rise in the share of companies undergoing corporate restructuring.

The Financial Services Commission said on August 2 that the second-quarter aggregate net profit of Korea's commercial banks was 1.1 trillion won, down 48 percent from 2.1 trillion won recorded in the same quarter last year.

The banks' interest income for the quarter was 8.7 trillion won, 9.7 percent lower than 9.6 trillion won a year ago. The net interest margin for the quarter was 1.88 percent, down 0.07 percentage point, the lowest level since the second quarter of 2009 when the margin was 1.72 percent. Non-interest income has also plunged to 500 billion won from the previous year's 1 trillion won.

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