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Outlook for Korean Banks Optimistic
November 5, 2004
The outlook for the Korean banking industry continues to be positive as its fundamentals are improving, analysts said on October 19. Buoyed by significant interest income and fewer loan-loss reserves in the first half of this year, the country's 19 banks earned a record 3.58 trillion won ($3.13 billion). Analysts are giving high marks to banks' tightened risk management practices, saying a recent fall in bank loans to SMEs and households is the result of their strengthened credit risk management. "The drop in lending is a good sign for the industry," said Cho Byung-moon, a banking analyst at LG Investment & Securities Co. "It will put a lid on bad loans, while slowing growth of interest incomes."