S. Korean savings banks' H1 net dips 39.1 pct

SEOUL, Feb. 23 (Yonhap) -- Total earnings by South Korean savings banks fell 39.1
percent in the first half of fiscal 2008 from a year earlier as falling stock
prices led to investment losses, the financial watchdog said Monday.

The combined net profit of 105 local mutual savings banks reached 186.7 billion
won (US$124.2 million) in the July-December period, compared with 306.4 billion
won the previous year, according to the Financial Supervisory Service (FSS).
"Operating profit declined as slumping stock markets brought about losses in
securities-related investment," the FSS said.
Securities-related investment losses came in at 211.4 billion won in the first
half, a turnaround from a 70.8 billion won in profit the previous year, it added.
As of the end of December, banks' total assets reached 69 trillion won, up 8.8
percent from six months earlier, the FSS said. Their capital adequacy ratio, a
key barometer of financial health, came in at 9.4 percent as of end-December, up
from 9.16 percent at the end of June on efforts to boost their capital base
through share and bond sales.
The delinquency rate for loans extended by savings banks reached 15.6 percent as
of the end of last year, up 1.6 percentage points at the end of June.
State-run debt clearer Korea Asset Management Corp. is in the process of buying
bad debt worth 1.3 trillion won related to property loans extended by local
savings banks.
Smaller builders, which borrowed mostly from savings banks to buy property during
the 2005-2006 housing market boom, are now struggling to service their debts.
sooyeon@yna.co.kr
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