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[Alpha Biz=(Chicago) Reporter Paul Lee] Interest income from local banks, which earned all-time interest income last year due to soaring market interest rates, fell in the first quarter of this year, a report showed.
According to the "Business Performance of Domestic Banks in the First Quarter of This Year (Preliminary)" released by the Financial Supervisory Service on the 2nd, the bank's interest income in January and March was KRW 14.7 trillion, down KRW 700 billion (4.4%) from the fourth quarter of last year. It is the first time in about three years that interest income at local banks has declined compared to the previous quarter since the first quarter of 2020. It increased by 2.1 trillion won (16.7%) from 12.6 trillion won in the first quarter of last year.
The bank's interest income fell by KRW 700 billion in three months because market interest rates continued to fall in January and March this year. The interest rate on five-year financial bonds, the benchmark interest rate for mixed mortgage loans, fell from 4.373% per year on Jan. 9 to 3.953% per year on March 31, while one-year financial bonds, which are used as interest rates based on credit loans, also fell from 4.040% to 3.593% per year during the same period. Interest income naturally decreased as market interest rates, which are the basis for lending rates, fell.
The bank's net profit for the first quarter, including interest income, was 7 trillion won, up 2.5 trillion won (55.9%) from 4.5 trillion won in the previous quarter. This is due to a 2 trillion won drop in sales and management costs, which amounted to 6.2 trillion won, due to large costs such as retirement benefits and advertising costs at the end of last year.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
