KEB swings to loss in Q1

SEOUL, May 8 (Yonhap) -- South Korea's No. 5 lender Korea Exchange Bank (KEB)
said Friday it swung to a net loss in the first quarter due mainly to squeezed
interest margins and one-off expenses.

Net loss came to 74.8 billion won (US$59.5 million) in the January-March period,
a turnaround from a net profit of 267.4 billion won a year earlier, the lender
said in a regulatory filing. It marked the first quarterly loss since the fourth
quarter of 2003.
Sales jumped 72 percent on-year to 7.03 trillion won while operating loss reached
142.6 billion won, it added.
"The net loss came as the lender's profit margin fell and one-off costs to
compensate early retirees were incurred," said an official at KEB.
The bank's net interest margin, a key barometer of profitability, came in at 2.18
percent in the first quarter, down 0.64 percentage point from three months
earlier as returns on certificates of deposit (CDs), which are tied to lending
rates, sharply declined.
South Korea's central bank had made six consecutive rate cuts totaling 3.25
percentage points to an all-time low of 2 percent until February, which pulled
down market rates like yields on CDs.
sooyeon@yna.co.kr
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