Industrial Bank of Korea suffers 40% dip in Q3 net

Decreased interest and non-interest income.

These were identified as the the culprits for Industrial Bank of Korea's dip in net profit.

The bank's net income amounted to 246.8 billion won or US$227.6 million in the July-September period, 39.9 percent less from a year earlier.

It posted a profit of 410.3 billion won in the previous year.

Revenue fell 14.7 percent on-year to 4.51 trillion won in the third quarter, and operating income tumbled 48.3 percent to 313.6 billion won in the same period, it added.

"We've cut back our investments in asset-backed securities and sold off more non-performing loans, which contributed to bringing down the operating income," said Chang Min-young, the head of investor relations department.

The state-run lender also cut its lending rates for smaller firms to help them with smoother fund flows amid a slowing economy. Its interest income slid to 1.31 trillion won last quarter from 1.44 trillion won three months earlier.

The bank mostly caters to small and medium enterprises.

IBK's net interest margin (NIM), a key barometer of profitability, reached 2.08 percent in the third quarter, down 0.1 percentage point from three months earlier, due mainly to lending rate cuts.

The lender said it put aside more reserves to cover possible loan losses. It set aside 365.7 billion won in the provisions, up 107.9 billion won from the previous quarter.

Its total assets reached 213.4 trillion won as of the end of September, up from 208.6 trillion won tallied in the previous quarter.

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