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Woori Bank, Korea's second largest bank by assets, said Tuesday its second-quarter net profit soared 35.8 percent on-year to 307 billion won ($300 million) thanks to a decrease in loan-loss provisions.
It means the bank's net profit in the first six months of 2016 totaled 750.3 billion won, up 45.2 percent from a year earlier.
The bank said it spent 92 billion won in one-time cost for the voluntary retirement of some employees as part of its restructuring efforts in the second quarter.
"Taking that into account, we had around 400 billion won of net profit for two quarters in a row," it said.
The improved earnings are mainly due to a drop in loan-loss reserves.
Last year, Woori set aside 691.1 billion won to deal with bad loans extended to a slew of shipbuilders such as Sungdong Shipbuilding & Marine Engineering Co. and STX Offshore & Shipbuilding Co.
The amount dipped to 430.7 billion won in the January-June period, it said.
But Woori has categorized loans to a bigger shipyard Daewoo Shipbuilding & Marine Engineering as "normal," unlike other creditors.
If the loans are categorized as "precautionary" loans , as other banks do, Woori will need to accumulate 7-19 percent of its loans for Daewoo as provisions.
A Woori official said the bank has already set aside some 6 percent of the loans in reserves.
The bank's net interest margin, a gauge of profitability, was unchanged at 1.42 percent in the second quarter although the Bank of Korea cut key rates in June. (Yonhap)
