Seoul Mutual Savings Bank (South Korea)

Operating loss continues as operating expenses exceed operating income while interest income decreased with growth of default loans.Net profit increased from the preceding year same period with gains from tangible asset sale and decrease of non-operating expenses.Steady improvement is required though fully encroached capital has been replenished with 30 billion won right issue to Woongjin Capital, major shareholder. Operating loss will continue with growing default loans though operating income will grow with deposits secured with high interest products based on management diagnosis of savings banks by the government.Profitability will hardly recover due to growth of write-off expenses and return of write-off allowance related to project financing credits sold to KAMCO despite growth of operating income.Asset soundness will improve with support by group companies in addition to the government¡¯s steady plan to improve savings banks.