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Savings banks swing to black in 2025's first half, delinquency rate falls

Published: 29 Aug. 2025, 09:04

A person passes by Pepper savings bank building in Gyeonggi on March 19. [NEWS1]

Savings banks returned to the black in the first half of the year from a year earlier, aided by a decline in loan-loss reserves, data showed Friday.

The combined net profit of 79 savings banks nationwide reached 257 billion won ($185 million) in the January to June period, shifting from a loss of 396 billion won a year earlier, according to their trade association.

The data showed that their loan-loss reserves declined by 686 billion won in the first half compared with a year earlier.

Their asset soundness improved in the first half, with the delinquency rate coming in at 7.53 percent at the end of June, down from 8.51 percent a year earlier.

The rate on corporate loans fell 1.99 percentage points on-year to 10.82 percent in the first half, while that on household loans gained 0.07 percentage points to 4.6 percent over the cited period.

Their average capital adequacy ratio stood at 15.6 percent at the end of June, the data showed.

Last year, they suffered a net loss for the second consecutive year by racking up a combined net loss of 397 billion won following a loss of 576 billion won the previous year.

Savings banks suffered net losses, primarily due to risky short-term real estate project financing loans.

Yonhap