Woori Finance Q3 net tumbles 83.6%

Woori Finance Holdings Co., South Korea's top banking group, said Friday that its third-quarter earnings tumbled 83.6 percent from a year earlier on squeezed profit margin and an increase in loan-loss reserves. Net profit amounted to 86.4 billion won (US$81.5 million) in the July-September period, compared with 525.5 billion won the previous year, the group said in a regulatory filing. From three months earlier, net income declined 41.7 percent. The group said that it allocated loan-loss reserves related to corporate overhaul, including ailing STX Group and the economic slowdown. Its loan-loss reserve amounted to 812 billion won last quarter, larger than 570.8 billion won three months ago. Woori Finance's performance is compared with earnings results logged by its rivals, including KB Financial Group Co. Korean banks have been suffering from weak earnings as a long streak of low rates undercut their net interest margin, and as the economic slowdown and corporate overhaul raised loan-loss reserves. But analysts said from the third quarter, their earnings may show signs of improvement as loan-loss reserves could stabilize. Woori Finance said that its net interest margin (NIM), a key gauge of profitability, reached 2.12 percent in the third quarter, down from 2.16 percent in the preceding quarter. Woori Bank, the flagship unit of the group, logged a net profit of 41.2 billion won in the third quarter, down 91.4 percent from a year earlier. The group's total assets amounted to 429 trillion won as of end-September, down 0.2 percent from three months earlier. The government is seeking to sell the state-invested Woori Finance in three different batches -- regional banks, banking and brokerage units -- by the end of 2014. Shares of Woori Finance closed at 12,350 won on the main bourse, down 1.98 percent from Thursday's close. The earnings results came out after the market closed.