South Korea's five major banks sold property assets worth nearly 75 billion won ($67 million) in the first half, far exceeding the 70 billion won for the whole of last year, data from the banks showed Sunday.
The move is part of their efforts to ride out declines in their net interest margins, which measure how much a bank earns from its loan and securities portfolios, amid record-low interest rates, bank officials said.
"Faced with ever-declining interest rates, banks felt the need to cut costs by selling some of their idling bank branches and other real estate assets. They also need to strengthen their mobile services as demand for transactions through non-face-to-face channels is on the rise," a bank official said.
The country's key rate stands at an all-time low of 1.25 percent.
The five banks -- KB Kookmin Bank, KEB Hana Bank, NH Bank, Shinhan Bank and Woori Bank -- disposed 74.6 billion won worth of real estate in the January-June period, higher than the 70.2 billion won worth of properties they sold for all of 2015, the data said.
Their property sales continued to rise from 27.7 billion won in 2014 and 18 billion won in 2013 as they seek to secure cash to prepare for a possible financial crisis arising from snowballing household loans and ride out declining interest rates and other deteriorating business environments, they said.
"As the banks plan to sell more of their property assets in the second half, their overall property sales are expected to exceed 100 billion won by the end of this year," the official said.
The number of the country's total bank branches came to 7,217 as of the end of March, down from 7,356 a year earlier.
Non-face-to-face channels already accounted for more than 90 percent of total financial transactions at the end of March, according to the Financial Supervisory Service. (Yonhap)
