Major South Korean banks are expected to post strong earnings in the third quarter despite the low interest rates and corporate restructuring as they focus more on profitable businesses, market watchers said Sunday.

The combined net profit of the big four banks -- Shinhan Financial Group, KB Financial Group, Hana Financial Group and Woori Bank -- was estimated at 1.75 trillion won ($1.54 billion) in the July-September period, according to the data compiled by the market researcher FnGuide.   

The market consensus based on 10 brokerage houses' projections was 5.3 percent up from the same period a year ago. All of their quarterly reports are due this week.

Shinhan Financial Group is expected to remain on top with 607.7 billion won in expected net earnings, a 10.5 percent fall from a year earlier.

The surge in fixed rate loans and demand deposits, accounts that may be withdrawn at any time, boosted its net interest margin, analysts said, while it raked in 5.2 billion won in profits by selling stakes in VISA.

KB Financial Group is projected to log a net 465.8 billion won, up 14.4 percent from a year earlier, thanks to a diversified business portfolio after acquiring a nonlife insurer and a brokerage house last year.

Hana Financial Group's net income consensus is estimated at 332.8 billion won in the third quarter, soaring 30.9 percent compared with a year earlier.

Analysts said Hana reduced large corporate loans with high overdue rate and increased loans to households and small and medium-sized firms, which boosted its overall profitability.

Woori Bank is expected to book 344.7 billion won in its third-quarter net, gaining 6.6 year-on-year.

The Bank of Korea on Thursday froze the key rate at 1.25 percent for a fourth consecutive month, citing concerns about rapidly increasing household debt and a possible rate hike in the US. (Yonhap)