SEOUL, May 20 (Xinhua) -- South Korean banks' combined net income fell in the first quarter due to a decrease in non-interest income, financial watchdog data showed Wednesday.
Net income of domestic banks stood at 6.7 trillion won (4.4 billion U.S. dollars) in the January-March quarter, down 3.9 percent compared to the same quarter of last year, according to the Financial Supervisory Service.
Their interest income grew 6.4 percent to 15.8 trillion won (10.5 billion dollars) on the back of the expanded interest-bearing assets and the higher net interest margin (NIM).
The NIM rose 0.03 percentage points to 1.56 percent in the first quarter on a yearly basis, while the interest-bearing assets swelled 4.8 percent to 3,556.0 trillion won (2.36 trillion dollars).
The country's central bank left its benchmark interest rate unchanged at 2.50 percent after reducing it by 25 basis points in February and May 2025 and in October and November 2024.
Expectations emerged for the central bank's policy rate hike amid rising inflationary pressure, caused by the Middle East tensions.
Non-interest income dropped 35.6 percent to 1.3 trillion won (862.8 million dollars), driven by higher market interest rates leading to losses on the valuation of securities.
Loan-loss expenses retreated 16.2 percent to 1.4 trillion won (929.2 million dollars) in the cited quarter.
Return on assets for local banks, a key gauge of profitability, dipped 0.07 percentage points to 0.64 percent, while the return on equity declined 0.89 percentage points to 8.68 percent. ■
