Why did Korean banks' first-half 2026 net income fall even though interest income hit a record high?

Net income fell mainly because non-interest income dropped sharply. The Financial Supervisory Service said profits tied to the benchmark KOSPI turned negative, amid rising interest rates, which weighed on overall earnings.

How much did 20 Korean banks earn in the first half of 2026, and what were the key income figures?

The 20 banks posted 13.8 trillion won in combined net income for January-June 2026. Their interest income was 32.2 trillion won, while non-interest income was 2.9 trillion won.

What risks did the Financial Supervisory Service say could hurt Korean banks' financial soundness?

The FSS pointed to external uncertainties such as the Middle East war and rising delinquency rates. It said those factors could burden banks’ fiscal soundness and that it would step up monitoring.

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

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Summary

Korean banks saw their combined net income fall in the first half of 2026, even as interest income reached a record six-month high, according to Financial Supervisory Service data. The 20 banks posted 13.8 trillion won in net income, down 6.4 percent year on year. The decline was driven mainly by a sharp drop in non-interest income, which fell 43.4 percent to 2.9 trillion won. The FSS warned that external uncertainty and rising delinquency rates could pressure banks’ financial soundness.

Key Facts

The combined net income of 20 banks was 13.8 trillion won in the January-June period, down 6.4 percent from a year earlier.
Interest income reached 32.2 trillion won in the first half, the highest six-month figure on record, and rose 8.3 percent year on year.
Non-interest income fell 43.4 percent to 2.9 trillion won from the same period a year earlier.
Profits related to the benchmark KOSPI swung to a deficit of 2.5 trillion won in the first half.
The Financial Supervisory Service said it would strengthen monitoring and encourage banks to expand their loss-absorption capacities.

By Yonhap

Published Aug 23, 2026 2:42 pm KST

ATM machines from local banks are seen in Seoul, Aug. 16. Yonhap

Net profits of Korean banks fell in the first half of 2026, due mainly to a fall in non-interest income, while their interest income recorded the highest six-month figure on record, data showed Sunday.

The combined net income of 20 banks came to 13.8 trillion won ($9.95 billion) in the January-June period, down 6.4 percent from the same period a year earlier, according to the data from the Financial Supervisory Service (FSS).

Their interest income came to 32.2 trillion won in the first half, up 8.3 percent year-on-year.

Non-interest income came to 2.9 trillion won, sharply falling by 43.4 percent from the same period a year earlier, according to the FSS.

The drop in non-interest income was blamed on a fall in profits related to the benchmark KOSPI market, amid a rise in interest rates, the FSS said. Profits related to the KOSPI swung to the red in the first half, generating a deficit of 2.5 trillion won.

The FSS said external uncertainties, such as the Middle East war, and increasing delinquency rates could pose a burden on the fiscal soundness of banks, as it vowed to strengthen monitoring and encourage banks to take measures to expand their loss-absorption capacities.

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