Surging Exchange Rate and Stock Prices Nearly Double Bank of Korea’s Net Profit

According to The Financial News, the Bank of Korea (BOK) almost doubled its net profit in just one year. The rapid rise in the won–US dollar exchange rate and stock prices significantly boosted returns on its foreign currency assets. Within those foreign assets, the BOK increased the share of cash-like holdings to secure liquidity as part of its market-stabilization efforts.
■Exchange rate, stocks, and bonds all climbedAccording to the BOK’s 2025 Annual Report released on the 27th, the bank’s net profit for fiscal year 2025 was 15.3275 trillion won. This represents an increase of 7.5086 trillion won, or 96.03%, from 7.8189 trillion won a year earlier. The BOK stated that the surge was mainly due to a sharp rise in net income from foreign currency assets, driven by the higher won–US dollar exchange rate and gains in securities prices.
Operating income rose by 6.9672 trillion won from the previous year to 33.4413 trillion won. Foreign exchange trading gains increased by 5.1539 trillion won, while gains on securities trading grew by 1.1879 trillion won. Interest income from securities expanded by 1.0516 trillion won.
Seokwon Nam, Head of Budget and Accounting Team, Planning and Coordination Department of the Bank of Korea, explained, “As the won–US dollar exchange rate rose, converting returns on foreign currency assets into won boosted overall net profit. Falling interest rates pushed up bond prices, generating trading gains on the bond side, and stock prices also rose sharply toward the end of the year.”
Operating expenses fell by 3.3826 trillion won to 12.7324 trillion won. This was mainly because losses on securities trading decreased by 2.1487 trillion won and interest on monetary stabilization bonds declined by 781.8 billion won. In the latter case, both the outstanding volume of these bonds and interest rates fell, reducing the amount of interest the BOK had to pay.
Under Article 99 of the Bank of Korea Act, 4.5982 trillion won, equivalent to 30% of net profit, was set aside as statutory reserves. Amounts earmarked for the Saving Encouragement Fund for Property of Agricultural and Fishing Households (23.2 billion won) and for the personal information protection compensation fund (1 billion won) were all allocated to discretionary reserves. The remaining 10.705 trillion won, or 69.8%, was paid to the government as fiscal revenue.
After the allocation of net profit for the 2025 fiscal year, the balance of reserves stood at 27.4915 trillion won. Discretionary reserves for fund contributions are capped at this level, which is about 4.4% of total assets. Internally, the BOK has set an appropriate reserve ratio at 5% of total assets.
Total assets at the end of last year were 631.5 trillion won, up 35.4801 trillion won from 595.5204 trillion won a year earlier. The balance of securities, including foreign securities, fell by 9.1702 trillion won to 417.6814 trillion won. However, deposits and repurchase agreements increased, with deposit balances rising by 18.4846 trillion won to 64.5175 trillion won and repurchase agreements by 20.45 trillion won to 40 trillion won.
Liabilities totaled 592.7808 trillion won, an increase of 25.6259 trillion won from 567.1549 trillion won at the end of the previous year. Currency in circulation and deposit balances rose to 210.6957 trillion won and 151.1231 trillion won, respectively, up 17.5437 trillion won and 20.8176 trillion won year-on-year.
■Expansion of cash-like foreign assetsWithin foreign currency assets, the share of cash-like assets increased. As of the end of last year, cash-like assets accounted for 10.6%, up 2.6 percentage points from a year earlier. In contrast, the share of directly managed investment assets fell by 3.3 percentage points from 67.2% to 63.9%, while entrusted assets inched up from 24.9% to 25.5%, a gain of 0.6 percentage points.
A BOK official noted, “Given the persistently high volatility in international financial markets, we managed our foreign currency assets with a focus on liquidity and safety. By expanding cash-like assets and other measures, we secured sufficient foreign currency liquidity so that liquidity needed for foreign exchange market stabilization could be supplied in a timely manner when market instability arises.”
By currency, the share of the US dollar declined by 2.4 percentage points from 71.9% to 69.5%, while the share of other currencies rose by 2.4 percentage points from 28.1% to 30.5%.

taeil0808@fnnews.com Reporter Kim Tae-il Reporter