Industrial Bank of Korea Q4 net plunges 89 pct

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SEOUL, Feb. 12 (Yonhap) -- The state-owned Industrial Bank of Korea (IBK) said
Thursday its fourth-quarter earnings plunged 89.2 percent on-year on higher
loan-loss reserves.
Net income stood at 15.4 billion won (US$11 million) in the October-December
period, compared with 144.3 billion won a year earlier, the IBK said in a
regulatory filing.
For all of 2008, net profit fell 34.3 percent on-year to 767 billion won, the
lender said.
The fall in fourth-quarter net profit is attributable to increasing reserves
against an expected rise in risky loans as a number of builders and shipmakers
are set to undergo restructuring on falling sales, said the IBK, which
specializes in lending to smaller firms.
The bank said it set aside 143.2 billion won in reserves last quarter.
As of the end of December, the bank's bad debt ratio came to 1.43 percent, up 0.7
percentage point from a year earlier, as default rates rose amid the deepening
economic slump.
The government injected 1 trillion won in capital and equities to the lender last
month in a bid to shore up the state bank's capacity to extend loans to
cash-strapped local companies.
The bank's tier-1 ratio, a key gauge of financial strength, stood at 7.24 percent
with its overall capital adequacy ratio reaching 11.39 percent at the end of
2008, both up from a year earlier, the IBK said.
Its total assets reached 147.6 trillion won, while its net interest margin, a key
barometer of profitability, was 2.52 percent, it said.
pbr@yna.co.kr
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