South Korean banks’ combined earnings more than doubled in the second quarter of this year from a year earlier on reduced bad debt losses, the financial watchdog said Thursday.

The combined net income of 18 local banks registered at 2.4 trillion won ($2.33 billion) in the April-June period, compared with 1 trillion won the previous year, according to the Financial Supervisory Service.

The second-quarter net profit marked the highest quarterly figure since the first quarter of 2012, when it hit 3.3 trillion won, the FSS added.

For the January-June period, the banks’ net reached 3.7 trillion won, up from 2.7 trillion won a year earlier.

The FSS noted the strong bottom line came as the banks set aside less loan reserves over the cited period as they managed to reduce fresh bad debts.

Their bad debt expenses reached 1.8 trillion won over the three-month period, down 34.9 percent on-year from 2.8 trillion won.

Interest income stood at 8.8 trillion won in the second quarter, edging up 1 percent on-year from 8.7 trillion won.

The net interest margin, a key gauge of their profitability, climbed to 1.82 percent in the April-June period from a five-year low of 1.8 percent in the previous quarter.

Their noninterest income from stock and bond investment trebled to 1.6 trillion won from 500 billion won over the cited period, on the back of stock rallies in the local equity market, the watchdog said.

The return on assets, another measure of banks’ profitability, came in at 0.5 percent in the second quarter, up 0.29 percentage point from a year earlier. (Yonhap)