South Korean domestic banks reported a combined preliminary net income of 13.8 trillion won for the first half, down 6.4% from 14.7 trillion won a year earlier, according to the Financial Supervisory Service's statement on Monday.
The latest data showed commercial and regional banks saw declines while internet-only banks posted growth.
Interest income rose 8.3% year-over-year to 32.2 trillion won, while non-interest income plunged 43% to 2.9 trillion won.
Loan loss expenses rose 8.6% to 3.5 trillion won, while return on assets fell to 0.65% from 0.74% and return on equity declined to 8.89% from 10.04% a year earlier.
The Financial Supervisory Service said it will closely monitor financial stability and guide banks to strengthen loss-absorbing capacity amid increasing uncertainty at home and abroad.