Hana Financial's net slips 10.27 pct in Q2

Major South Korean banking group Hana Financial Group Inc. said Friday that its second-quarter net profit fell 10.27 percent from a year earlier due to a rise in loan-loss reserves.

Net income stood at 374.9 billion won ($321 million) in the April-June period, compared with 417.8 billion won a year earlier, the company said in a regulatory filing.

Compared with three months earlier, the group's bottom line stayed nearly unchanged from 374 billion won.

For the first half, its net profit jumped 22.7 percent to 748.8 billion won from 610.4 billion won a year ago.

Hana Financial said that the decline came as it set aside 376.3 billion won for loan-loss reserves in the second quarter, up 41.4 percent from 266 billion won a year ago.

Its second-quarter interest income edged down to 1.13 trillion won from 1.18 trillion won a year earlier, while its commission income rose 12.2 percent on-year to 505 billion won from 450 billion won.

The group's net interest margin, a key gauge of profitability, dropped 0.13 percentage point to 1.8 percent from 1.93 percent over the cited period, with that of flagship Hana Bank also dipping 0.13 percentage point to 1.37 percent.

Hana Bank posted an 8 percent on-year gain in its second-quarter net profit to 299.6 billion won, while its sister Korea Exchange Bank saw its net plunge 56.2 percent to 109.2 billion won.

The two banking affiliates are on the verge of a merger after receiving preliminary approval from the financial authorities.

Shares of Hana Financial closed down 1.8 percent at 27,250 won, underperforming the benchmark KOSPI's 0.93 percent fall. The earnings were announced after the market closed. (Yonhap)