In the first half of this year, the savings banks' net profit was 257 billion won, a turnaround from a deficit of 395.8 billion won during the same period last year. The ratio of non-performing loans decreased from 11.75% to 9.49% during this period, resulting in a 68.75 billion won reduction in bad debt expenses.
The Financial Supervisory Service released the business results of savings banks and mutual finance associations for the first half of this year on the 29th.
The total assets of savings banks in the first half of this year were 118.8 trillion won, a decrease of 1.8% from the end of last year (120.9 trillion won). The FSS explained that this was because "the reduction of non-performing loans and a conservative sales strategy for soundness management led to a decline in loan assets focused on corporations."
The savings banks' corporate loan assets decreased by 5.5% from 49.5 trillion won at the end of last year to 46.7 trillion won in the first half of this year. In contrast, household loans increased by 1.6% from 40.4 trillion won to 41.1 trillion won during the same period.
The savings banks' arrears rate was 7.53% in the first half of this year, a slight decrease from 8.52% at the end of last year. The household loan arrears rate rose by 0.07 percentage points to 4.6%, while corporate loans fell by 1.99 percentage points to 10.82%. The reserve ratio for bad debts decreased by 1.16 percentage points to 112%.
The savings banks' capital adequacy ratio was 15.6% in the first half of this year, a slight increase from 14.98% at the end of last year. This was due to a 600 billion won decrease in risk-weighted assets from the decline in loan assets, as well as a 500 billion won increase in capital from net profit.
Meanwhile, the total assets of mutual finance, including credit unions, NongHyup, fisheries cooperatives, and forestry, reached 775.3 trillion won in the first half of this year, an increase of 17.7 trillion won from the end of last year. During the same period, total loans increased by 2.5% to 535 trillion won. Of this, household loans increased by 1.8 trillion won, while corporate loans increased by 10.7 trillion won. Total deposits rose by 3.1% to 666.4 trillion won.
However, the net profit for the first half of this year was 417.6 billion won, a decrease of 60.8% (646.3 billion won) compared to the same period last year (1.0639 trillion won). The net profit of the credit business sector in the financial division was 2.0772 trillion won, down 24.6% (675.9 billion won) from the same period last year (2.7531 trillion won).
The arrears rate for mutual finance was 5.7% in the first half of this year, an increase of 1.16 percentage points from 4.54% at the end of last year. The overall arrears rate has been steadily rising, recorded at 4.38% in the first half of last year, 4.54% at the end of last year, and 5.62% in the first quarter of this year. The household loan arrears rate rose to 2.27% in the first half of this year, an increase of 0.36 percentage points from the end of last year, while corporate loans rose by 1.73 percentage points to 8.48% during the same period.
The non-performing loan ratio for mutual finance was 6.27% in the first half of this year, an increase of 1.01 percentage points from 5.26% at the end of last year. The non-performing loan ratio has also risen, recorded at 4.81% in the first half of last year, 5.26% at the end of last year, and 5.88% in the first quarter of this year.
The FSS evaluated, "The savings banks actively organized non-performing loans and proactively set aside provisions, resulting in a decrease in bad debt expenses in the current quarter and a turnaround to profit." However, regarding mutual finance, it noted, "In a situation where there was passivity in organizing bad loans, the deterioration in real estate development loans led to increased bad debt expenses and a decrease in net profit."