Woori Finance Holdings Co., Korea's top banking group, said Thursday its second-quarter earnings tumbled 63.1 percent on-year on higher loan-loss reserves and a falling profit margin.
Net income amounted to 292.6 billion won ($258.7 million) in the April-June period, compared with a profit of 792.3 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 are undergoing downfall on prospects over the central bank's rate cut, squeezing their interest income.
Woori Finance's interest income amounted to 1.84 trillion won last quarter, down 1.3 percent from three months earlier.
Shares of Woori Finance closed at 10,700 won on the main bourse, down 1.83 percent from the previous session. The result came out after the market closed.
Woori Bank, the flagship unit of the group, logged a net profit of 220.5 billion won in the second quarter, down 71.2 percent from a year earlier.
The group's total assets stood at 405 trillion won as of end-June, almost unchanged from three months earlier.
The sale of Woori Finance fell through again last month as no prospective bidders showed interest in buying Korea's largest financial services company.
The government has been seeking to privatize Woori Finance in a bid to recoup taxpayers' money injected to the group during the 1997-98 Asian financial crisis. (Yonhap)