Woori says Q2 earnings fall 63% after more loan losses

Woori Finance Holdings, Korea’s top banking group, said yesterday its second-quarter earnings declined 63 percent on higher loan-loss reserves and falling profit margin.

Net income amounted to 292.6 billion won ($258.7 million) in the April-June period, compared with a profit of 791.3 billion won a year earlier, the group said in a regulatory filing.

In the first half, net profit reached 937.6 billion won, also down 27.6 percent from a year earlier, it added.

The group said its weaker bottom line came as it put aside more reserves to brace for corporate reshuffles of ailing firms and its profit margin declined.

The group allocated 924.9 billion won in loan-loss reserves in the second quarter, up 113 percent from three months ago, it added.

Its net interest margin (NIM), a gauge of profitability, came in at 2.4 percent in the second quarter, down from 2.54 percent three months earlier. It allocated 924.9 billion won in loan-loss reserves in the second quarter, up 113 percent from three months ago.

Local banks’ NIMs have been on the decline as market interest rates follow the central bank’s rate cut.

Yonhap