ID :
104535
Thu, 02/04/2010 - 09:16
Auther :
Shortlink :
https://www.oananews.org//node/104535
The shortlink copeid
S. Korean banks` 2009 earnings dip 8.6 pct
(ATTN: ADDS more details in paras 3-4)
SEOUL, Feb. 4 (Yonhap) -- South Korean banks' total earnings declined 8.6 percent
in 2009 from a year earlier on decreased interest income and squeezed lending
margins, the financial watchdog said Thursday.
The combined net profit of 18 commercial and state-run lenders reached 7.1
trillion won (US$6.18 billion) last year, compared with 7.8 trillion won the
previous year, according to a preliminary estimate by the Financial Supervisory
Service (FSS).
In the fourth quarter, their combined bottom line came to 1.5 trillion won, down
48.3 percent from three months earlier. But Korean banks swung to a profit in the
October-December period, a turnaround from a loss of 400 billion won a year
earlier.
The FSS said the weaker earnings for the whole year of 2009 came as local banks'
net interest margin (NIM), a key barometer of profitability, declined in tandem
with a fall in market rates.
Their NIM came in at 1.98 percent in 2009, down 0.33 percentage point from a year
earlier. Local banks' interest income declined by 2.3 trillion won on-year to
32.2 trillion won, it added.
Korean banks' NIM had been under pressure as record-low benchmark interest rates
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 later last year. In the fourth quarter,
their NIM reached 2.33 percent, the watchdog added.
"Amid an economic recovery, local banks' profitability is improving as bad-debt
expenses are gradually decreasing and their profit margins have improved," the
FSS said in a statement. "But in the final quarter of 2009, Korean banks' net
income deteriorated as bad-debt expenses increased to brace for corporate
revamps."
Creditor banks of the cash-strapped Kumho Asiana Group decided Dec. 30 to put two
other ailing units -- Kumho Industrial Co. and Kumho Tire Co. -- under a debt
rescheduling program. Local banks' bad-debt expenses increased by 1.4 trillion
won on-quarter to 3.3 trillion won in the fourth quarter, it added.
sooyeon@yna.co.kr
(END)
SEOUL, Feb. 4 (Yonhap) -- South Korean banks' total earnings declined 8.6 percent
in 2009 from a year earlier on decreased interest income and squeezed lending
margins, the financial watchdog said Thursday.
The combined net profit of 18 commercial and state-run lenders reached 7.1
trillion won (US$6.18 billion) last year, compared with 7.8 trillion won the
previous year, according to a preliminary estimate by the Financial Supervisory
Service (FSS).
In the fourth quarter, their combined bottom line came to 1.5 trillion won, down
48.3 percent from three months earlier. But Korean banks swung to a profit in the
October-December period, a turnaround from a loss of 400 billion won a year
earlier.
The FSS said the weaker earnings for the whole year of 2009 came as local banks'
net interest margin (NIM), a key barometer of profitability, declined in tandem
with a fall in market rates.
Their NIM came in at 1.98 percent in 2009, down 0.33 percentage point from a year
earlier. Local banks' interest income declined by 2.3 trillion won on-year to
32.2 trillion won, it added.
Korean banks' NIM had been under pressure as record-low benchmark interest rates
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 later last year. In the fourth quarter,
their NIM reached 2.33 percent, the watchdog added.
"Amid an economic recovery, local banks' profitability is improving as bad-debt
expenses are gradually decreasing and their profit margins have improved," the
FSS said in a statement. "But in the final quarter of 2009, Korean banks' net
income deteriorated as bad-debt expenses increased to brace for corporate
revamps."
Creditor banks of the cash-strapped Kumho Asiana Group decided Dec. 30 to put two
other ailing units -- Kumho Industrial Co. and Kumho Tire Co. -- under a debt
rescheduling program. Local banks' bad-debt expenses increased by 1.4 trillion
won on-quarter to 3.3 trillion won in the fourth quarter, it added.
sooyeon@yna.co.kr
(END)
