Woori Finance Holdings Co., South Korea's top banking group, said Friday that its second-quarter earnings declined 51.4 percent from a year ago on a one-off factor and falling profit margin.
Net profit amounted to 148.2 billion won (US$131.7 million) in the April-June period, compared with 305 billion won the previous year, the group said in a regulatory filing. From three months earlier, net income declined 29.5 percent.
In the first half, the group's earnings fell 63 percent on-year to 358.3 billion won.
The group said it allocated a one-off expense over corporate tax related to its brokerage unit sales, and its profit margin is on the decline amid the low rate trend.
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.
Local banking groups have been suffering from falling profitability, finding it difficult to generate profit amid a long streak of low rates and the economic slowdown. Adding to worries, a series of corporate restructuring led them to set aside more reserves to cover possible loan losses.
Woori Finance said that its net interest margin (NIM), a key gauge of profitability, reached 2.16 percent in the second quarter, down from 2.18 percent in the preceding quarter.
Woori Bank, the flagship unit of the group, logged a net profit of 194.2 billion won in the second quarter, down 15.6 percent from a year earlier.
The bank's ratio of substandard loans against total lending rose to 2.9 percent last quarter from 1.98 percent three months earlier, due to liquidity supply related to troubled STX Group.
Substandard loans refer to loans overdue more than three months, widely dubbed as bad debt.
The group's total assets amounted to 429 trillion won as of end-June, up 2.7 percent from three months earlier.
Shares of Woori Finance closed at 11,550 won on the main bourse, up 0.43 percent from Thursday's close. The earnings result came out after the market closed. (Yonhap News)
