Cumulative Net Profit of Domestic Banks Reaches 21.1 Trillion Won in Q3... Non-Interest Income Drives Performance

Financial Supervisory Service Releases Q1?Q3 Business Results for Domestic Banks
Net Profit Up 2.3 Trillion Won Year-on-Year
Interest Income +0.3 Trillion Won, Non-Interest Income +1.1 Trillion Won

As of the third quarter of this year, the profitability of domestic banks improved compared to the same period last year. This was due to increases in both interest income and non-interest income. In particular, non-interest income rose as foreign exchange and derivatives-related profits increased, driven by a significant drop in exchange rates.

According to the 'Business Performance of Domestic Banks for Q1-Q3 2025' released by the Financial Supervisory Service on November 20, the cumulative net profit of domestic banks for the third quarter reached 21.6 trillion won, up 2.3 trillion won (+12.0%) from 18.8 trillion won in the same period last year.

By bank type, the net profit of commercial banks was 14.1 trillion won. Specifically, city banks increased by 1.5 trillion won and internet banks by 50 billion won. In contrast, regional banks saw a decrease of 50 billion won. The net profit of specialized banks was 6.9 trillion won, up 800 billion won from 6.2 trillion won in the same period last year.

The return on assets (ROA) of domestic banks for the cumulative third quarter was 0.67%, similar to the 0.66% recorded in the same period last year. The return on equity (ROE) was 8.99%, up 0.17 percentage points from 8.82% a year earlier. This indicates that banks managed their funds more efficiently than the previous year. ROA and ROE are profitability indicators that show how efficiently a company earns money relative to its total assets or invested capital.

During the same period, interest income of domestic banks was 44.8 trillion won, an increase of 300 billion won (+0.7%) from 44.4 trillion won in the prior year. Despite a 0.07 percentage point decrease in net interest margin (NIM), interest-earning assets grew by 4.5%.

Non-interest income, including fees, trust, and securities, reached 6.8 trillion won, up 1.1 trillion won (+18.5%) from 5.7 trillion won in the same period last year. The Financial Supervisory Service explained, "This was due to a 2.6 trillion won increase in foreign exchange and derivatives-related profits, driven by a sharp decline in exchange rates during the first three quarters."

General and administrative expenses were 20.7 trillion won, up 1.2 trillion won from 19.4 trillion won in the same period last year. Labor costs increased by 900 billion won, while material costs rose by 300 billion won.

Credit loss expenses of domestic banks stood at 4.7 trillion won, a modest increase of 100 billion won (+2.4%) from 4.6 trillion won a year earlier. This was mainly due to a continued rise in delinquency rates on won-denominated loans.

Non-operating profit and loss of domestic banks was 1.6 trillion won, an increase of 3.1 trillion won from negative 1.6 trillion won in the same period last year. This was largely attributed to the exclusion of one-off costs such as ELS compensation (1.4 trillion won) in the first half of last year and increased investment gains from subsidiaries and affiliates.

The Financial Supervisory Service stated, "Going forward, there is a possibility that credit loss expenses could rise significantly, especially in vulnerable sectors, due to domestic and external uncertainties such as U.S. tariff policies. We will continue to encourage banks to strengthen their loss-absorbing capacity and enhance soundness management so that they can reliably fulfill their role in supplying funds."