Capital firms' net jumps 25% on lower costs

Seventy three credit-specialized finance firms in South Korea, excluding credit card companies, saw their net profits jump more than 25 percent on-year in the first half of this year thanks to less loan loss costs and lower interest rates, official data showed Tuesday.

Their aggregate net profits amounted to 959.7 billion won ($866 million) during the six months, up 25.8 percent from a year earlier, according to the Financial Supervisory Service.

It's mainly attributable to a reduction in delinquency rates and a key interest rate cut that led to a fall in funding costs, added the state financial watchdog.

The combined assets of those firms also climbed 15.6 percent to 112.7 trillion won from a year earlier.

"In general, the profitability and soundness of those credit-specialized finance companies are decent," the FSS said.

But the authorities will guide them to strengthen risk management in case of a hike in interest rates and also continue to support their efforts to expand overseas and other businesses in order to diversify profit sources, it added. (Yonhap)