Banking groups' H1 net plunges 62.3%

Combined earnings logged by banking groups in South Korea tumbled 62.3 percent in the first half from a year earlier on squeezed profit margins and increased bad expenses, the financial watchdog said Monday. A total of 10 bank-focused financial services companies posted a combined 2.3 trillion won (US$2.14 billion) in net profit in the January-June period, compared with 6.13 trillion won a year earlier, according to the Financial Supervisory Service (FSS). The banking groups held a combined 279 affiliates, including 51 banking units, as of end-June, the FSS added. Local banks are suffering from weak earnings as their net interest margin, a gauge of profitability, has been on the decline amid the central bank's accommodative policy stance. They also had to put aside higher loan-loss reserves amid the economic slowdown and a series of corporate overhauls. On a consolidated basis, the total assets by the banking groups amounted to 1,915.3 trillion won as of end-June, up 3.9 percent from the end of last year. Woori Finance held the largest assets with 336.7 trillion won, followed by Shinhan Financial Group with 319.3 trillion won and Hana Financial Group with 302.5 trillion won, it added. The banking groups' bad debt ratio reached 1.95 percent as of end-June, up from 1.5 percent tallied at the end of last year, the FSS said.