Bank of Korea: 2025 firm margins rise, small firms fall, weak-coverage share at record
In short
The Bank of Korea said South Korean firms' operating margin rose to 5.2% in 2025 from 4.6%, but small and mid-sized firms slipped to 2.8% while large firms rose to 6.7%. The share of firms whose operating profit did not cover interest costs rose to 42.9%, the highest since records began in 2009.
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The Bank of Korea said on 21 October, in its 2025 corporate management analysis, that South Korean firms' profitability and stability improved last year while growth slowed. The survey covers 982,767 non-financial for-profit corporations. Their sales growth fell to 2.4% from 3.7% a year earlier. [ 1 , 2 , 3 , 4 ]
The operating profit margin rose to 5.2% from 4.6%, the highest since 2021 (5.6%). Manufacturing rose from 5.1% to 6.3% and non-manufacturing from 4.1% to 4.3%. Within manufacturing, electronics, video and communications equipment went from 8.3% to 14.0% and shipbuilding and other transport equipment from 6.4% to 11.6%. Yonhap and Kyunghyang Shinmun attributed this to higher sales of high-value-added semiconductor products and greater revenue recognition of high-value-added ships. [ 1 , 3 , 4 ]
Results differed by firm size. Large firms' operating margin rose from 5.6% to 6.7%, while that of small and mid-sized firms fell from 3.0% to 2.8%, the lowest since the data began in 2009, according to Yonhap and Kyunghyang Shinmun. Kyunghyang Shinmun said the gap between the two groups widened from 0.5 percentage points in 2023 to 3.9 points last year. [ 2 , 3 , 4 ]
The share of firms whose interest coverage ratio was below 100% rose from 42.8% to 42.9%, the highest since the statistic began in 2009. Such firms' operating profit does not cover their interest costs. The overall interest coverage ratio rose from 244.1% to 292.7%. The debt ratio fell from 119.9% to 116.2%, the lowest since 2019, and borrowing dependence fell from 31.0% to 30.4%. [ 1 , 3 , 4 ]
Lee Mi-ju, head of the Bank of Korea's corporate statistics team, said the share below 100% is calculated excluding firms with no interest expense, so it reflects a slight rise among firms with an interest burden rather than a worsening overall. Lee said first- and second-quarter results this year show small firms' profitability improving along with large firms, and the trend may not continue. [ 2 , 3 ]
The Bank of Korea said it does not judge that polarisation deepened, since profitable sectors were concentrated in large firms and small firms are improving this year. Asia Economy and Kyunghyang Shinmun nonetheless reported that polarisation deepened. According to Yonhap, the bank did not separately calculate the contribution of large semiconductor firms to overall profitability and growth. [ 1 , 3 , 4 ]
Sales growth fell in manufacturing (4.6% to 2.4%) and non-manufacturing (2.9% to 2.3%). Yonhap said sales growth in coke and refined petroleum products fell to -7.6% from 1.4% on lower oil prices, and transport and storage slowed from 11.6% to 2.6% on lower shipping rates. Large firms' sales growth fell from 3.4% to 2.0% and small and mid-sized firms' from 4.1% to 3.0%. [ 1 , 2 , 3 ]
Why it matters
Outlets framed the figures as a widening gap between large firms and small and mid-sized firms. The Bank of Korea said it does not judge that polarisation has deepened, because small-firm profitability is improving this year.
Key facts
- The Bank of Korea's 2025 corporate management analysis covers 982,767 non-financial for-profit corporations, and their sales growth fell to 2.4% from 3.7%. [ 1 , 2 , 3 , 4 ]
- The operating profit margin rose to 5.2% from 4.6%, the highest since 2021 (5.6%). [ 1 , 2 , 3 , 4 ]
- Large firms' operating margin rose from 5.6% to 6.7%, while that of small and mid-sized firms fell from 3.0% to 2.8%, the lowest since the data began in 2009. [ 2 , 3 , 4 ]
- The share of firms with an interest coverage ratio below 100% rose from 42.8% to 42.9%, the highest since 2009. [ 1 , 3 , 4 ]
- The overall interest coverage ratio rose from 244.1% to 292.7%. [ 1 , 3 , 4 ]
- The debt ratio fell from 119.9% to 116.2%, the lowest since 2019 (115.6%), and borrowing dependence fell from 31.0% to 30.4%. [ 1 , 2 , 3 , 4 ]
Confirmed by several sources
- The Bank of Korea reported that corporate profitability and stability improved in 2025 while sales growth slowed to 2.4% from 3.7%. [ 1 , 2 , 3 , 4 ]
- Operating margin rose to 5.2% from 4.6%, driven by electronics, video and communications equipment (8.3% to 14.0%) and shipbuilding and other transport equipment (6.4% to 11.6%). [ 1 , 3 , 4 ]
- Large firms' margin rose to 6.7% while small and mid-sized firms' fell to 2.8%. [ 1 , 2 , 3 , 4 ]
- The share of firms with interest coverage below 100% reached 42.9%, the highest since 2009. [ 1 , 3 , 4 ]
Still unclear
- Whether polarisation between large and small firms has deepened. Asia Economy, Kyunghyang Shinmun and Maeil Business describe deepening polarisation, but the Bank of Korea said it does not judge that polarisation deepened, since small firms' profitability is improving this year.
- How much large semiconductor firms contributed to overall profitability and growth. Yonhap reported that the Bank of Korea did not calculate the contribution separately.
- Whether the rise in the share of firms below 100% interest coverage will continue. Bank of Korea team head Lee Mi-ju said the trend may not continue, citing improved small-firm profitability in the first and second quarters of this year.
What local media are saying
Timeline, local time
- Asia Economy, Newsis and Yonhap publish reports on the Bank of Korea's 21 October release of its 2025 corporate management analysis. [ 1 , 2 , 3 ]
- Kyunghyang Shinmun publishes an analysis of the 'K-shaped' polarisation in the figures. [ 4 ]
- Maeil Business publishes its report on large-firm profits and small firms' difficulty paying interest. [ 5 ]