South Korea\'s state-run Industrial Bank of Korea (IBK) said Friday that its third-quarter earnings rose 12 percent from a year earlier due to an increase in interest income. Net income amounted to 410.3 billion won (US$369.3 million) in the July-September period, compared with 366.3 billion won the previous year, the state-run bank, which mostly caters to small and medium enterprises (SMEs), said in a regulatory filing. Compared with three months earlier, net profit declined 14.7 percent as the bank recorded smaller gains by selling bad debts in the third quarter. The third-quarter bottom line fell short of the market consensus of 458 billion won in a poll of analysts by Yonhap Infomax, the financial news arm of Yonhap News Agency. Revenue rose 17.1 percent on-year to 5.3 trillion won and operating profit gained 24.4 percent to 606.8 billion won, it added. Shares of IBK closed at 14,500 won on the main bourse, up 3.57 percent from Thursday\'s close. The results came out after the market close. IBK\'s net interest margin, a key barometer of profitability, reached 2.63 percent in the third quarter, down 0.03 percentage point from the second quarter, due mainly to rises in funding costs. The bank\'s interest income totaled 1.15 trillion won in the third quarter, up from 1.09 trillion won as its lending to smaller firms was on the rise. IBK\'s credit costs declined in the third quarter as it put aside smaller reserves to cover possible loan losses. It set aside 252.4 billion won in the provisions, down 13.2 billion won from the second quarter. Its total assets amounted to 195.6 trillion won as of the end of September, up from 184.1 billion won tallied in the second quarter.