South Korea's banks reported a sharp rise in profits in the third quarter, highlighting the extent of the recovery in AsiaPacific's fifth-largest economy in recent months.

Korea's financial watchdog said yesterday that profits at the 18 banks rose 53 per cent to Won2,300bn ($1.9bn) in the July to September period, from Won1,500bn a year ago. Loan-loss provisions fell 36 per cent to Won1,600bn.