(LAED) Hana Financial returns to Q3 profit

Hana Financial Group Inc., South Korea's No. 4 financial holding company, said Friday it swung to a profit in the third quarter of this year on a rise in lending profitability and decreased loan-loss provisions.

Hana Financial earned 240 billion won (US$203 million) in the July-September period, a sharp turnaround from a 73.3 billion won loss a year earlier, the company said in a regulatory filing. Compared to three months earlier, the bottom line surged 22 percent.

Revenue, however, tumbled 42 percent on-year to 6.5 trillion won, with operating balance switching to a gain of 310.9 billion won from a 146.6 billion won loss last year, Hana Financial said.

Shares of Hana Financial closed 0.98 percent higher at 36,050 won on the Seoul bourse. The earnings results were released after the stock market closed.

Hana Bank, the banking unit of the financial company, posted a net profit of 211.1 billion won in the third quarter, a turnaround from a 71.2 billion won loss a year earlier and up 24 percent from the second quarter.

Hana Financial attributed the third-quarter gain to a sharp increase in interest income and decreased provisions for risky loans.

"The net interest margin (NIM) has climbed for the fifth month in a row to 1.72 percent since hitting a trough in April," the company said in a separate statement. NIM, or the loan-deposit spread, is a key measure of profitability.

As of end-September, its loan delinquency ratio stood at 0.92 percent, down 0.15 percentage point from three months earlier, with the rate of non-performing loans, or loans overdue more than three months, falling to a pre-crisis level of 1.56 percent, it said.

The capital adequacy ratio, the barometer of capital strength, was 14.8 percent as of the end of the third quarter, it said.

Hana Financial is set to spin off and launch a wholly owned credit card firm on Nov. 2. The company is in talks with telecommunication giant SK Telecom Co. to unload an about 49 percent stake.

A company official said in a conference call that "the difference in opinions is not narrowing," but dismissed market speculation that the talks fell apart due to a formidable disagreement on prices.

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