RPT-PREVIEW-Korea bank, broker earnings seen mixed on debt woes

(This is a repeat of an earlier story ahead of KB Financial's earnings announcement)

* What: July-Sept results of Korea banks, Samsung Securities

* When: KB Financial on Oct 30, Samsung Sec in early Nov

* One-off gains to lift KB Financial, outlook murky

By Kim Yeon-hee

SEOUL, Oct 27 (Reuters) - Mounting loan delinquencies, higher credit costs and weaker interest margins are expected to hurt third-quarter earnings at South Korean banks, which are facing a bleak outlook as economic growth slows.

Banks will remain under pressure from tight funding markets and contracting margins, a weakening won KRW= and the slowing economy, although a series of government liquidity-support measures may provide them a short-term boost.

South Korea's central bank on Monday delivered its biggest ever interest rate cut and promised other measures to calm the panic that has been driving down financial markets.

Banks in South Korea, with their large short-term foreign borrowing, have looked especially vulnerable to the global credit crunch in their struggle to access funds along with the threat that rapidly slowing growth at home could push many of their corporate customers into bankruptcy.

KB Financial (105560.KS), which runs top South Korean bank Kookmin, will likely post a solid quarterly profit thanks to one-off proceeds from a stake sale, despite rising costs for sour loans and softening lending margins. (See table below for earnings estimates)

But securities houses, led by Samsung Securities (016360.KS), South Korea's most valuable brokerage, are facing steep earnings declines as a 50-percent slide in local stock markets this year and dwindling stock turnover has slashed their commission and fee incomes.

The rapid pace of the economic slowdown, with South Korea's third-quarter growth hitting a 4-year low, and tumbling stock markets have been damaging asset quality at financial services firms.

Loan delinquencies and defaults are expected to pile up from small- and medium-sized enterprises (SMEs) and builders, to which domestic banks have raised their exposure since 2004.

"It is premature to talk of a recovery in the banking sector," said Park Jeong-hyun, a Hanwha Securities analyst.

"Government steps are mostly about increasing liquidity so that banks can lend more to small- and medium-sized companies.

But the more they lend to SMEs, the more bad loans they will end up with, with earnings hurt."