ID :
105819
Wed, 02/10/2010 - 16:03
Auther :

(LEAD) Woori Finance swings to profit in Q4


(ATTN: ADDS more details and info throughout)
SEOUL, Feb. 10 (Yonhap) -- Woori Finance Holdings Co., South Korea's No. 2
financial services company, said Wednesday it swung to a profit in the fourth
quarter from a year earlier due to decreased loan-loss reserves.

Net profit stood at 156.8 billion won (US$135.1 million) in the October-December
period, a turnaround from a loss of 664.8 billion won a year earlier, the group
said in a regulatory filing. But compared with three months earlier, net income
declined 67.6 percent, hit by its exposure to ailing Kumho Asiana Group.
For the whole year of 2009, the group's earnings jumped 126 percent to 1.03
trillion won.
"In 2010, improving profit margins and decreasing loan-loss provisioning will
likely help Woori Finance log better earnings," the group said in a statement.
Shares of Woori Finance closed at 13,500 won on the main bourse, up 1.89 percent
from the previous session.
Woori Bank, the group's flagship unit, logged a net income of 204 billion won in
the fourth quarter, compared with a net loss of 691.1 billion won, it added.
The group's net interest margin (NIM), a key barometer of profitability, came in
at 2.31 percent in the final quarter of 2009, up 0.37 percentage point from three
months earlier.
Korean banks' NIMs had been under pressure as record-low benchmark interest rates
have narrowed their loan-deposit spread.
But signs of an economic recovery and expectations of a rate hike by the central
bank have begun to boost market rates like returns on certificates of deposit,
helping their profit margins improve late last year.
In the fourth quarter, Woori Finance set aside 775 billion won in loan-loss
provisions, down from 1.1 trillion won the previous year. But the group's
provisions increased from 34.9 billion won in the third quarter as it had to put
more money to cover potential losses related to Kumho Asiana Group's debt
restructuring.
Creditor banks of the cash-strapped Kumho Asiana Group decided on Dec. 30 to put
two other ailing units -- Kumho Industrial Co. and Kumho Tire Co. -- under a debt
rescheduling program.
Woori Finance's total assets stood at 317.9 trillion won as of the end of
December, down 10.5 percent from the previous quarter, it added.
sooyeon@yna.co.kr
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