Korean banks' earnings surged 34.2 percent on-year in the first three quarters of this year thanks to more interest and investment income, the financial regulator said Monday.
The combined net profit of 18 local lenders came to 7.3 trillion won ($6.5 billion) in the January-September period, compared with 5.5 trillion won a year earlier, the Financial Supervisory Service (FSS) said in a report.
For the July-September quarter, the lenders recorded 2.7 trillion won in net income, more than double the 1.2 trillion won earned three months earlier, the FSS noted.
The higher bottom line came as widened loan-deposit spreads helped improve banks' profits while bullish stock trading also pushed up earnings from sales of their stock holdings, the watchdog said.
However, this year's bank earnings fell short of the level shown before the global financial crisis in 2007, when their combined earnings reached 13.1 trillion won for the three quarters, the FSS noted.
The slack stemmed from lenders' increased costs to cover potential losses from loans extended to property developers and large corporate borrowers, it said.
"It's difficult to expect that local banks' profits will increase sharply this year as lenders are aggressively bracing for an increase in bad debts amid a sluggish property market and massive corporate debt restructuring," the FSS said.