Domestic banks reported net income totaling KRW5,679.3 billion for the first three quarters of the year, up KRW4,075.4 billion from KRW1,603.9 billion a year earlier. Higher interest income from increased lending amid stable interest rate spreads, a drop in provisioning for problematic loans and a jump in investment income and bancassurance revenues helped to push the net income higher. The ROA of the 19 domestic banks averaged 0.74%, compared with 1.38% for U.S. commercial banks (first half, 2004) and 1.25% for the top 5 banks of the U.K. (2003).

Loans classified as substandard or below (SBL) fell KRW1,059.1 billion to KRW17,619.3 billion from KRW18,678.4 billion at the end of 2003. The ratio of SBL to total loans outstanding (SBL ratio) also fell to 2.37% from2.63% during the same period on a large drop in SBL related to SK Networks and a general improvement in loan asset soundness.

* Please refer to the attached PDF for details.