Banks' net income falls in H1; interest profit hits record high: data

South Korean banks experienced a decline in net profits during the first half of 2026, largely attributed to a decrease in non-interest income, while their interest income recorded a record-high for the six-month period, data revealed on Sunday. The combined net income of the 20 major banks totaled 13.8 trillion won (US$9.95 billion) for the January-June timeframe, marking a 6.4% decrease compared to the same period last year, as per the Financial Supervisory Service (FSS).

The interest income for the banks reached 32.2 trillion won in the first half, a 8.3% increase year-over-year, according to the FSS. Conversely, non-interest income plummeted sharply by 43.4% from the previous year, amounting to 2.9 trillion won, as reported by the FSS. The decline in non-interest income was primarily attributed to a downturn in profits linked to the benchmark KOSPI market, exacerbated by rising interest rates, according to the FSS.

The KOSPI-related profits turned negative in the first half, resulting in a deficit of 2.5 trillion won. The FSS cautioned that external uncertainties, such as the ongoing conflict in the Middle East and rising delinquency rates, could potentially undermine the financial stability of banks, and pledged to intensify monitoring and encourage banks to implement measures to bolster their capacity to absorb losses.