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Provisioning hits Korea's banks

Provisioning hits Korea’s banks

(South Korea) - South Korean banks' reporting season has produced an up-down second quarter with growing provisions to cover corporate loan losses having a big impact. Woori Bank (formerly Hanvit Bank) has produced a pre-audited net profit rise of 11.6 percent to 385.4 billion won (US$333.5 million) from 345.3 billion won in its first quarter. The country's second biggest lender posted a first half 730.7 billion won net profit (712.9 billion net in the first half of 2001). 655.5 billion won in provisions including 49.9 billion won for computer chips maker Hynix Semiconductor have been set aside.

Korea Exchange Bank (KEB) has reported a 61 percent drop in second quarter earnings to 21 billion won, down from its first quarter 54.1 billion won result. Its second quarter profit brought KEB's earnings for the first half to 75.1 billion won compared with 65.6 billion won a year ago.

Middle ranked Hana Bank has also seen its net profit for the second quarter drop to 103.1 billion won from 123.6 billion won in the first three months to produce total earnings for the first half of 226.7 billion won, up 38 percent from a year ago. Credit card loan provisions drove its 66.8 billion in set aside reserves.

Kookmin, South Korea's biggest bank, has tabled a preliminary 502.6 billion won net profit, a 25 percent fall from its first quarter result.

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