The company awaits regulator to order Lone Star to sell stake in Korea Exchange Bank to discuss deal.
South Korea's Hana Financial Group Inc. reported Friday weaker-than-expected third-quarter earnings because of foreign exchange-related losses and an increase in administrative costs.
Its net profit fell sharply compared with the previous quarter as its second quarter result was boosted by a one-time gain from sale of a stake in Hyundai Engineering & Construction Co.
Korea's fourth largest financial holding firm by assets also said its net interest margin, the industry's key profitability measure, fell four basis points to 2.27% as it focused more on asset growth in the July-September quarter. The company expects the net interest margin to rise by one to two BPs in the fourth quarter, the group's executives said in a conference call after the firm's earnings report.
Net profit for the three months ended Sept. 30 fell 58% from the previous quarter to KRW205.3 billion ($178.9 million), lower than the average KRW232.9 billion forecast of seven analysts polled by Dow Jones Newswires.
The earnings were hit by a sharp decline in the won against the dollar in the third quarter, but the firm said it expects to swing to a profit in the fourth quarter as the exchange rate stabilizes.
Under international financial reporting standards, the company has to translate debt held by overseas affiliates into the local currency at the prevailing rate, according to analysts. This resulted in a KRW58 billion forex-related loss, Hana said.
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