IBK Q2 net falls less-than-expected 24.4 pct

SEOUL, July 30 (Yonhap) -- South Korea's state-invested Industrial Bank of Korea
(IBK) said Thursday its second-quarter earnings declined a smaller-than-expected
24.4 percent from a year earlier on lending growth and an eased fall in its net
interest margin.

Net profit amounted to 213.3 billion won (US$172.1 million) in the April-June
period, compared with 282.2 billion won the previous year, the lender said in a
regulatory filing. But compared with three months earlier, net income jumped
345.3 percent on lending growth and an on-quarter decrease in loan-loss reserves.
"An on-quarter jump in the bottom line came as the bank set aside less loan-loss
reserves from the previous quarter and a fall in the interest margin eased," an
official at the IBK said. The bank, which mainly caters to small and medium
enterprises, put aside 355.8 billion won in the second quarter, compared with
615.9 billion won in the first quarter, as the economic downturn eased and
smaller firms' loan delinquency decreased.
The lender's net interest margin (NIM), a key barometer of profitability, reached
2.32 percent in the second quarter, down from 2.37 percent three month earlier.
IBK's capital adequacy ratio, a key gauge of financial soundness, came in at
12.05 percent as of end-June, up from 11.75 percent at the end of March.
The bank's loan delinquency rate declined to 0.87 percent, compared with 1.06
percent in the preceding quarter. Korean lenders saw their loan default rate fall
as they wrote off a chunk of bad debts and the economy showed signs of
improvement.
IBK's total assets reached 158.2 trillion won as of the end of June, up 4.9
percent from three month earlier, it added.
The South Korean government maintains a 57.7 percent stake in IBK.
sooyeon@yna.co.kr
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