Preliminary figures show domestic banks’ net income for 2006 will come to KRW13.49 trillion, compared with KRW13.63 trillion for 2005. Interest income rose KRW1.51 trillion on sharply increased lending, but the overall net earnings were held back by a KRW1.73 trillion jump in income tax expenses (partly from a drop in losses carried forward) for 2006. Operating and nonoperating income for the year totaled KRW13.26 trillion and KRW4.12 trillion, respectively.

Loans outstanding at end-2006 totaled KRW873.8 trillion, up KRW122.4 trillion from end-2005 total of KRW751.4 trillion. Despite continued improvement in asset soundness, loan loss provisions fell only slightly in 2006—from KRW5.1 trillion to KRW5.0 trillion—due to more stringent provisioning requirements.

ROA for 2006 fell to 1.12% from 1.27% a year earlier on reduced net interest margin. Gross profit ratio, a key measure of profitability, came to 2.82%, down slightly from 2.98% a year earlier.

* Please refer to the attached PDF for details.