IBK posts 52.1 pct rise in Q3 earnings

SEOUL, Oct. 30 (Yonhap) -- South Korea's state-run Industrial Bank of Korea (IBK) said Friday its third-quarter earnings jumped 52.1 percent from a year earlier on increased interest income.

Net profit amounted to 219.5 billion won (US$185.6 million) in the July-September
period, compared with 144.3 billion won the previous year, the lender said in a
regulatory filing.
"The bank's earnings recovered in the third quarter as the economy began to pick
up and lending increased," said an official at the bank, which mainly caters to
small and medium enterprises.
Korean banks' bottom line rose from three months earlier in the third quarter as
their net interest margin (NIM), a key barometer of profitability, began to
recover and loan-loss provisioning to brace for a corporate overhaul declined
amid an economic rebound.
IBK's NIM reached 2.42 percent in the third quarter, up from 2.32 percent three
months earlier.
Korean banks' NIMs were under pressure as record-low benchmark interest rates
narrowed their loan-deposit spread. But signs of an economic recovery and
expectations of a rate hike by the central bank have begun to boost market rates
like returns on certificates of deposit, helping their margins improve.
The bank's loan delinquency rate declined to 0.78 percent, down 0.09 percentage
point from 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 capital adequacy ratio, a key gauge of financial soundness, came in at
12.04 percent as of end-September, down from 12.06 percent from three months
earlier.
IBK's total assets reached 162 trillion won as of the end of September, up 9.6
percent from the end of last year, it added.
The South Korean government maintains a 57.7 percent stake in IBK.
sooyeon@yna.co.kr
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