At the present pace with combined interest earnings hovering at 5.5 trillion won per quarter, the total for the whole year is expected to surpass the 20 trillion-won mark.

Market observers said the main contributor to the increase can be found in the rise of net interest margin, which is how much money retail banks earn from customers' deposits after subtracting expenses and other outlays associated with bringing in funds.

The NIM reading for all banks has risen this year, mainly due to a better loan-deposit spread that stood at 2.33 percent in the July-September period for local lenders, according to the Bank of Korea. This is significantly higher than the 2.3 percent spread tallied in December of 2017, although the difference between what banks give to customers for deposits and what they earn from lending money has shrunk marginally as the year progressed.

Bank insiders said the rise in interest rates has made it harder to get low interest deposits, while the delay in the BOK raising key rates has also affected NIM numbers and, as a result, lenders' earnings. (Yonhap)