The Bank of Korea Reports 1.4 Trillion KRW Net Profit Last Year... Lowest Since 2008

46% Decrease Compared to Last Year

The Bank of Korea's net profit last year was 1.3622 trillion won, a 46.4% decrease from the previous year. This is the lowest level since it turned a profit in 2008.

According to the "2023 Annual Report" released by the Bank of Korea on the 29th, last year's net profit was 1.3622 trillion won, down 1.183 trillion won from 2.5452 trillion won in 2022. In 2021, the Bank recorded a record high net profit close to 8 trillion won due to the global stock market boom, but from 2022, the impact of rising interest rates led to an increase in interest on monetary stabilization bonds and a decline in bond prices and stock prices, causing profits to start decreasing.

The Bank explained that the decrease in last year's net profit was mainly due to "an increase in interest on securities, but a decrease in foreign exchange trading gains and securities trading gains, resulting in a significant reduction in total revenue."

The Bank's total revenue last year was 19.4469 trillion won, and total expenses were 17.5829 trillion won. Total revenue decreased by 1.5478 trillion won compared to the previous year, and total expenses also decreased by 115.3 billion won.

The proportion of dollar-denominated assets in the Bank's foreign currency assets (excluding International Monetary Fund positions, gold, and special drawing rights) was 70.9% at the end of last year. This is a 1.1 percentage point decrease from 72% at the end of 2022. As risk aversion increased and there was a preference for safe assets, the U.S. dollar strengthened, expanding the proportion of U.S. dollar assets. The proportion of other currencies was 29.1%, up 1.1 percentage points from 28% the previous year.

Among the Bank's foreign currency assets, cash equivalents accounted for 7.2%, down 2.8 percentage points from 10% at the end of the previous year. Direct investment assets accounted for 68.5%, and entrusted assets accounted for 24.3%.

By product, the proportion of government bonds increased by 5.4 percentage points to 44.8% compared to the previous year. The proportion of government agency bonds decreased by 0.8 percentage points to 13.3%, and corporate bonds decreased by 0.2 percentage points to 10.8%. Asset-backed securities increased by 0.2 percentage points to 11.7%, while stocks decreased by 0.5 percentage points to 10.9% compared to the previous year.

The Bank allocated 408.7 billion won, which is 30% of net profit, to the legal reserve fund, and 31.5 billion won to the discretionary reserve fund for the purpose of contributing to the Farmers and Fishermen Lump-sum Savings Encouragement Fund. The remaining 922.1 billion won was paid to the government as revenue.

As of the end of last year, the Bank's total assets amounted to 536.4019 trillion won, a decrease of 46.4242 trillion won from 582.8261 trillion won at the end of the previous year. This was due to a significant decrease in promissory note loans caused by the end of temporary COVID-19 support measures and a reduction in financial intermediary support loans. Liabilities amounted to 514.9018 trillion won, down 46.0047 trillion won from 560.9065 trillion won at the end of the previous year. This was because repurchase agreements decreased as liquidity adjustment scale declined.