South Korea’s Woori Bank Co. reported higher-than-expected earnings for the first quarter on a rise in both interest and non-interest income and expected its financial soundness would improve further in the latter half of this year following the planned sale of Kumho Tire Co.

Woori Bank announced in a regulatory filing on Friday that its net profit in January-March period reached 589.7 billion won ($552 million), up 341.8 percent from the previous quarter, but down 7.5 percent from the same period a year ago. Operating profit more than doubled to 821.3 billion won from the previous quarter, while sales slid 26.3 percent to 5.2 trillion won over the same period.

Its operating profit and net profit both exceeded the market estimates of 680.6 billion won and 498.0 billion won, respectively. Excluding 170.6 billion won worth of one-off gains from its bond sales related to the development of Hua Fu building in China in the first quarter of last year, the bank also has seen an on-year gain in its bottom line in the first three months of this year.

Shares of Woori Bank ended at 15,300 won on Friday, up 0.33 percent or 50 won from the previous session.

Woori Bank’s net operating revenue that includes interest and non-interest income reached 1.68 trillion won in the first quarter, up by more than 10 percent from the previous quarter. The lender’s non-interest income, in particular, jumped 54.9 percent to 316.1 billion won during the same period thanks to a growth in sales of asset management products such as of funds and trust.

Net interest income also gained 3.6 percent over the cited period on improved net interest margin led by an increase in low-expense savings and a growth in loans extended to small- and mid-size companies.

Woori Bank has also improved its asset quality by seeking asset growth and credit management reform. Total expenses for bad accounts in the first quarter of this year dropped 57.0 percent from the previous quarter, while bad debt expense rate fell from 0.34 percent to 0.21 percent.

Woori Bank’s non-performing loan ratio was 0.79 percent while coverage ratio 99.9 percent as of end of March, which is up 0.04 percentage point and 3.4 percentage points, respectively, from the same period last year.

The financial health of Woori Bank is expected to improve further in the second half of this year when the planned sale of Kumho Tire in which the bank owns the largest 14.15 percent stake is completed, which would allow it to retrieve its loan loss reserves.

Meanwhile, Woori Card Co., an affiliate of Woori Bank, reported a net profit of 39.3 billion won in the first quarter ended March this year, while Woori Investment Bank Co. 6.4 billion won.

By Lee Seung-yoon and Lee Eun-joo

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