Korea's KB Financial net falls 29.2% in Q3

Net profit down by 29.2 percent.

For that decline, KB Financial Group is blaming squeezed profit margins and higher loan-loss reserves.

South Korea's No. 2 banking group reported weaker-than-expected earnings for the third quarter amounting to 410.1 billion won (US$374 million) in the July-September period.

The figure represents a slip by 29.2 percent from a year earlier.

The group expected a net profit of 484.9 billion won for the quarter.

KB Financial Group joined the trend of Korean banks' weak earnings, as they were squeezed by falling profit margins and higher loan-loss reserves.

Local banking groups also had to put aside higher reserves to cover potential loan losses stemming from court receivership of Kukdong Engineering & Construction Co. and its holding company Woongjin Holdings Co.

To tackle the economic slowdown and soured loans from the Kukdong failures, the group said it allocated loan-loss reserves worth of 375.7 billion won last quarter, up 30 percent from a year earlier. The reserve rose 3.1 percent from three months ago.

Kookmin Bank, the flagship unit of the group, reported a 3.18 percent gain in net profit to 326.3 billion won in the third quarter from the previous year.

The bank's NIM came in at 2.12 percent in the third quarter, down from 2.23 percent tallied in the second quarter.

The group's total assets reached 374 trillion won as of end-September, up 11.9 trillion won from the end of last year.

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