(LEAD) IBK net profit up over 10-fold in Q4

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SEOUL, Feb. 11 (Yonhap) -- The state-run Industrial Bank of Korea (IBK) said
Thursday its net profit spiked more than 10-fold in the fourth quarter from a
year earlier on the back of expanded interest income and lower loan-loss
reserves.

Net income was 229.8 billion won (US$198.6 million) in the October-December
period, compared with 15.4 billion won the same period in 2008, said IBK, which
caters mainly to small and mid-sized enterprises. It was an expansion of 1,393.6
percent.
Revenue, however, plunged 56.2 percent to 3.8 trillion won year-to-year, the
company said.
Compared with the previous three months, the fourth-quarter bottom-line was up
4.7 percent, according to IBK.
The bank closed up 3.98 percent to 13,050 won on the Seoul stock market, before
the earnings were made public.
The steep increase in the fourth quarter net income was due to rising
profitability from lending and the smaller reserve amount the lender had to set
aside to cover risky loans, IBK said.
IBK put aside a total of 1.18 trillion won in 2009 in reserves against potential
losses from lending, 4.8 percent less than the previous year, it said.
In the last three months of 2008, local banks' earnings were battered due to
massive loan-loss provisions as a flood of bank loans went sour amid the global
economic rout.
Net interest margin (NIM), the difference between interest paid on deposits and
interest earned from lending, stood at 2.63 percent in the fourth quarter last
year, up from 2.53 percent a year earlier, the lender said. NIM is a key measure
of loan profitability.
Non-performing loans, or those overdue more than three months and likely to
default, accounted for 1.2 percent of IBK's entire lending to companies and
households as of end-2009, the lender said. The figure was down from 1.43 percent
booked at end-2008.
For all of 2009, IBK's net profit reached 710.5 billion won, down 7.4 percent
year-on-year.
pbr@yna.co.kr
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