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Net income amounted to 238.2 billion won (US$195 million) in the April-June period, a turnaround from a loss of 74.8 billion won three months earlier, the lender, controlled by U.S. buyout fund Lone Star Funds, said in a regulatory filing. Compared with a year earlier, net profit dipped 3.3 percent.
Sales rose 36.7 percent year-on-year to 4.66 trillion won while operating profit declined 10.7 percent to 280.1 billion won, it added.
Shares of KEB closed 0.85 percent lower at 11,600 won on the main bourse.
"Lower reserves to cover possible loan losses and an eased fall in the net interest margin (NIM) helped the bank return to a profit last quarter," a KEB official said. KEB put aside 187 billion won in such reserves in the April-June period, down 42.5 percent from the preceding quarter.
The lender recorded a one-time income of 136.8 billion won by selling its stake in Hyundai Engineering & Construction Co. in May.
The bank's NIM, a key barometer of profitability, came in at 2.17 percent in the second quarter, down 0.01 percentage point from three months earlier. Korean lenders had seen a sharp decline in NIM until the first quarter as the central bank cut its key interest rate by a total of 3.25 percentage points between October and February.
The lender's loan delinquency ratio reached 0.96 percent at the end of June, down 0.28 percentage point from the previous quarter, it added. Local banks recently saw their loan default rates fall as they wrote off a portion of bad debts and the economy showed signs of improvement.
Meanwhile, KEB's capital adequacy ratio, a key gauge of financial health, came in at 14.64 percent as of end-June, up from 14.3 percent at the end of March.
The bank's total assets reached 111.3 trillion won as of the end of June, up 7.9 percent from the previous year, it added.
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