SEOUL– South Korea’s credit unions, or member-owned financial cooperatives, saw their combined net profit fall 1.3 percent on year for the first half of this year, due to a rise in loan-loss provisions, data showed Tuesday.
The combined net profit of 2,258 credit unions, including Nonghyup and Suhyup banks, stood at 1.21 trillion won (US$1.06 billion) for the January-June period, down 16.1 billion won from a year earlier, according to the data by the Financial Supervisory Service.
Their combined loan-loss provisions jumped 131.2 percent on year to 198.7 billion won for the first six months of this year, the data showed.
As of the end of June, the average delinquency rate of loans extended by the credit unions rose 0.15 percentage point from six months ago to 1.39 percent, according to the latest findings.
From April this year, financial authorities required second-tier banks to set aside more loan-loss provisions, in a move to curb high-risk home lending.
The tougher rule was applied to home loans by savings banks, Nonghyup and Suhyup banks, and other mutual savings banks that can charge more than 20 percent interest per annum.
Source: Yonhap News Agency