NEW KOOKMIN HEAD PROMISES IMPROVED ASSET QUALITY, PRODUCTIVITY.

SEOUL, Nov 1 Asia Pulse - Kookmin Bank (KSE:060000), South Korea's No. 1 lender, will bolster efforts to improve asset quality and productivity in its endeavor to maintain its leading status, the new head of the leading lender pledged Monday.

"The biggest issue at Kookmin is its low asset quality," said Kang Chung-won during his inauguration speech Monday. "We should write off more bad loans. We will also boost the ratio of loan-loss reserves to total loans to 100 per cent from the current 74 per cent."

Kang, 54, replaced Kim Jung-tae, who was barred from seeking another term in September after being found responsible for accounting irregularities. The new CEO served as chief of Seoul Bank from 2000-2002, when the bank merged successfully with Hana Bank, the country's third-biggest lender.

The pledge came after local brokerage houses expressed cautious optimism on the lender's profitability and asset quality, in the wake of Kookmin's third-quarter earnings announcement in October.

Last month, the lender said it posted a net profit of 375 billion won (US$329 million) in the third quarter, more than double the amount of the previous three-month period.

However, about 50 billion won of the net income came from non-current factors, such as corrections in its financial statement, Dongwon Securities Co. said in a report.

Excluding the non-current factors, Kookmin's bottom line does not exceed market expectations of about 325 billion won, Dongwon said.