Data released on Thursday revealed that South Korea's banking sector achieved a net profit increase of over 18% year-on-year in the first half of this year, driven by substantial growth in non-interest income that more than offset a modest decline in interest income.

According to data from Korea's Financial Supervisory Service (FSS), the combined net profit of 20 Korean banks reached 14.9 trillion won (approximately $10.66 billion) from January to June this year, representing an increase of 2.3 trillion won, or 18.4%, compared to 12.6 trillion won in the same period last year.

Interest income for the first half totaled 29.7 trillion won, down 0.1 trillion won or 0.4% from the previous year.

Non-interest income reached 5.2 trillion won, surging 3.4 trillion won or 53% compared to the same period last year.

During the first half of this year, these banks set aside 3.2 trillion won in loan loss provisions, an increase of 600 billion won or 23% from the previous year.

The data showed that the banks' return on assets (ROA) improved to 0.75% in the first half from 0.67% in the same period last year, while return on equity (ROE) rose 1.08 percentage points to 10.18%.