(LEAD) Hana Financial Group Q3 net down 8.9 pct on loan-loss reserves

All News 16:28 October 23, 2020

(ATTN: REWRITES headline, lead; UPDATES with more details

SEOUL, Oct. 23 (Yonhap) -- Hana Financial Group Inc. a major South Korean banking group, said Friday its third-quarter net profit fell 8.9 percent on-year as it put aside more loan-loss reserves to brace for the pandemic-caused economic slowdown.

Net income reached 772.2 billion won (US$681.6 million) in the July-September period, compared with 847.3 billion won in the same period of last year, the group said in a regulatory filing. From three months earlier, net profit rose 11.1 percent.

The weaker bottom line came mainly because the banking group set aside reserves worth 172.8 billion won in the July-September quarter in a bid to increase its buffer from the fallout of the COVID-19 pandemic.

Operating income rose 37.2 percent on-year to 1.06 trillion won while revenue declined 43 percent to 6.52 trillion won.

The operating profit was 20.2 percent higher than the average estimate, according to the survey by Yonhap Infomax, the financial data firm of Yonhap News Agency. The estimate of net profit was not available.

The group said its net interest margin, a key barometer of profitability, stood at 1.58 percent as of end-September, down 0.04 percentage point from three months earlier. Its total assets amounted to 578 trillion won as of end-September.

Hana Bank, the group's flagship unit, posted a net profit of 593.2 billion won in the third quarter, down 22.2 percent from the previous year when the group logged a one-off profit by selling properties.

The group's non-banking business fared relatively well in the third quarter.

Hana Financial Investment, the group's brokerage unit, logged a net profit of 115.5 billion won, up 96.6 percent from a year earlier.