South Korean banks are expected to suffer sharp decline in second-quarter net profit.
This is attributed to an absence of gains from equity sales, an increase in administrative costs, heavier provisioning due to the euro-zone crisis and tougher regulatory guidance aimed at reducing the risk of household debt.
Hana is likely to report a 51% year-on-year fall in net profit to 239 billion won or US$207.6 million due to a decline in the value of its foreign currency-denominated assets and a one-time bonus payment to its employees, according to the average forecast of seven analysts.
KB Financial will likely report a 33.3% year-on-year fall in net profit to KRW554.6 billion.
Shinhan Financial Group is expected to report a 35.1% net profit decline from a year earlier to KRW625.8 billion. It has been the most profitable of Korea's banks because of its relatively balanced business portfolio, but its credit card business looks likely to weigh on earnings after the government recently changed guidelines on how to set the fees they charge businesses.
Woori Finance Holdings is set to report a 44.9% year-on-year fall in net profit to KRW436.1 billion.
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