Banks' income fall hit by massive reserves related to corporate overhauls and distressed property loans.
South Korean banks are expected to log better earnings for the third quarter from three months earlier, but the size of their bottom line would hinge on provisions over sour property-linked loans, analysts said Thursday.
Leading financial services company Woori Finance Holdings Co. and its rival KB Financial Group Inc. are expected to swing to the black in the July-September period, according to FnGuide Inc., a financial information provider.
Woori Finance is projected to post around 451 billion won (US$388.5 million) in net income from a net loss of 41 billion won in the second quarter. KB Financial Group is estimated to earn about 500 billion won in the third quarter after losing 335 billion won three months earlier, it added.
Analysts said Korean banks' earnings are expected to improve in the third quarter mainly because some of them would benefit from one-off stake sales. Woori Finance and No. 3 industry player Shinhan Financial Group are likely to post about 200 billion won and about 100 billion won in one-time profits, respectively, from sales of their stakes in Hynix Semiconductor Inc. and Daewoo International Corp.
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