South Korea’s Woori Bank earned a net 460.8 billion won in the second quarter and 1.1 trillion won ($977 million) combined for the first six months, beating the full 2015 net income as surge in consumer debt and active investment in derivatives amid low-interest environment buoyed banking profits.

Net earnings soared 50.1 percent on year in the second quarter and 46.4 percent for the six-month period to its best first-half performance in six years, the country’s third largest bank said in a regulatory filing on Thursday.

Shares of Woori Bank closed Thursday at 18,600 won, unchanged from the previous session.

The robust performance was driven by steady improvement in net interest margin and strong growth in non-interest income while operational expenses and bad loan cost continued to fall, said the bank.

Net interest margin - an indicator for profitability - rose to 1.45 percent in the second quarter from 1.42 percent in the year ago period.

Profit in its primary income of interest gap rose 2.5 percent on year to 2.6 trillion won while returns from investment in derivatives, foreign exchange, and other instruments surged 41.2 percent on year to 756.4 billion won.

The bank under oligopolistic management after the government sold a 30 percent stake last year also reported improvement in its balance integrity with non-performing loan (NPL) ratio edging down 0.6 percentage points to 0.82 percent at the end of June from six months ago.

When excluding its loan risk exposed to shipbuilders SPP Shipbuilding and STX Offshore & Shipbuilding, NPL ratio came down 0.78 percent.

Default rate was improved to 0.42 percent, and its coverage ratio against potential losses rose 15.7 percentage points to 187.7 percent.

By Park Joon-hyung

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