The Korea Herald

피터빈트

Korean banks suffer losses in Q2 on bad shipping loans

By 안성미

Published : Sept. 1, 2016 - 15:38

    • Link copied

[THE INVESTOR] South Korean banks suffered huge losses in the second quarter, largely due to financing the ailing shipping and shipbuilding industries.

The combined net loss of 17 commercial and state-run banks stood at 400 billion won (US$356.69 million) from April-June period, compared to a net profit of 2.2 trillion won in the same period last year, according to data released by Financial Supervisory Service on Sept. 1. 



The commercial banks reported net profit of 1.6 trillion won in the cited period. However, the loss of 2 trillion won by state-run banks, including Korea Development Bank -- the main creditor of debt-ridden Hanjin Shipping -- dragged down the combined figure.

“The restructuring of companies like Daewoo Shipbuilding & Marine Engineering, STX and Hanjin Shipping raised the bad debt expenses of state-run banks,” an FSS official said.

The bad debt expense of all South Korean banks increased to 6.3 trillion won in the cited period, compared to 4.1 trillion won on-year.

However, as banks put aside hundreds of billion won in loan-loss provisions, Korean bank’s non-performing loan ratio decreased to 1.79 percent as of end of June, down 0.08 percent from March.

By Ahn Sung-mi (sahn@heraldcorp.com)