SEOUL, KOREA – Commercial banks are fretting over the gloomy forecast that the banks' net profit would plunge in the next year. According to in-house research results, the net profit for the year 2013 would decline by up to 40 percent from this year, following a 25-percent fall this year.
This is due to a decreasing deposit-loan spread as the benchmark rate has falled lately. In addition, more and more companies and individual households go bankrupt, thereby increasing the volume of non-performing loans.
For example, Woori Bank expects its net profit to plummet by 30 to 40 percent. Kookmin and Shinhan Banks also see their net income drop by 20 percent. Only Hana Bank expects a similar level of net profit for the next year.
Based on these estimates, the aggregate net profit for the top-four commercial banks for 2013 would be 4.6 trillion won, from this year's 5.4 trillion won and last year's 7.45 trillion won.
*Article provided by The Korea Economic Daily
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