Korea Exchange Bank Q3 net almost triples

SEOUL, Nov. 3 (Yonhap) -- Korea Exchange Bank (KEB), South Korea's No. 5 lender,
said Tuesday its third-quarter earnings nearly tripled from a year earlier on
one-off gains and lower loan-loss provisions.

Net income amounted to 422.1 billion won (US$358.4 million) in the July-September
period, up 179.7 percent from the previous year, the lender, controlled by U.S.
buyout fund Lone Star Funds, said in a regulatory filing. Compared with three
months earlier, earnings jumped 77.2 percent on an improved profit margin.
Sales tumbled 46.5 percent on-year to 3.25 trillion won while operating profit
climbed 31.2 percent to 230 billion won, it added.
Shares of KEB closed down 3.76 percent to 12,800 won on the main bourse.
The bank booked a one-off profit of 229.6 billion won from corporate tax refunds
related to the merger with its credit card unit in March 2004.
The bank's net interest margin (NIM), a key barometer of profitability, came in
at 2.49 percent in the third quarter, up from 2.17 percent from three months
earlier.
Korean banks' NIMs have been under pressure as record-low benchmark interest
rates have 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 profit margins
improve.
KEB put aside 83.7 billion won in loan-loss reserves last quarter, down 55.2
percent from three months earlier as the pace of a rise in bad debts eased.
The lender's bad debt ratio stood at 1.25 percent in the third quarter, down from
1.36 percent the preceding quarter. The country's financial watchdog has advised
local banks to lower their bad loan ratio to around 1 percent by the end of this
year.
The bank's total assets reached 101.4 trillion won as of the end of September,
down 0.2 percent from three months earlier, it added.
sooyeon@yna.co.kr
(END)