Woori Finance Q1 net plunges 70 pct

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SEOUL, May 7 (Yonhap) -- Woori Finance Holdings Co., South Korea's top financial
service company, said Thursday its first-quarter earnings plunged 70.3 percent
due mainly to higher loan-loss reserves.
Net income stood at 162.28 billion won (US$128.4 million) in the January-March
period, compared with a profit of 546.28 billion won a year earlier, Woori
Finance said in a statement.
Revenue grew 75.3 percent on-year to 24.24 trillion won while operating profit
slid 63 percent to 290.89 billion won, it said.
The state-owned company, however, swung to the black in the first quarter from a
net loss of 664.8 billion won the previous quarter.
Shares of Woori Finance Holdings were trading at 11,550 won as of 11:50 a.m., up
4.52 percent from Wednesday's close.
"The on-year earnings slump came after Woori Finance increased reserves against
risky loans as some local construction companies and shipbuilders went under
corporate restructuring," said a bank official. "But compared with the previous
quarter, the reserves fell around 30 percent, resulting in a net gain."
The company set aside 739.5 billion won in loan-loss provisions in the first
quarter and its total assets stood at 337.9 trillion won as of the end of March,
up 30.5 trillion won from a year earlier, it said.
First-quarter earnings for Woori Bank, the company's flagship unit, fell 62
percent to 167.45 billion won from a year earlier, after posting a net loss of
691.14 billion won in the fourth quarter.
The lender's revenue came in at 21.42 trillion won in the first quarter, up 88
percent on-year with operating profit dropping 66 percent to 186.84 billion won
over the cited period.
The ratio of bad debts to total lending jumped to 1.69 percent at the end of
March from 0.63 percent a year ago, while the lender's total assets stood at
255.4 trillion won, up 19.6 trillion won.
Woori Bank's capital adequacy ratio, a key measure of financial health, stood at
12.8 percent, up 1.4 percentage points from three months earlier, it said.
pbr@yna.co.kr
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