Bo-eun leads the digital content team. She has covered foreign affairs, North Korea, tech, economy and gender issues at The Korea Times. She did a short stint at the South China Morning Post in Hong Kong, where she obtained a new perspective on news production and life. Small sources of joy for her are lounging in the sun, having a good latte and swimming.
Foreign banks' net profits double in Q3
By Kim Bo-eun
By Kim Bo-eun
Foreign banks saw a surge in earnings in the third quarter of the year, despite tough circumstances due to low interest rates.
Citibank and Standard Chartered (SC) Bank saw their net profits for the third quarter double from the same period last year. The growth rate far outperforms that of major local banks, which ranges from -31.7 percent to 2 percent.
Citibank recorded 90 billion won in net profit, up 119 percent from the same period in 2018. Its accumulated net profit for the first three quarters of the year comes to 295.6 billion won, growth of 64.2 percent year-on-year.
Citi said non-interest income drove its growth in profit. Interest income decreased by 1.9 percent.
Citibank Korea CEO Park Jin-hei
to 241.2 billion won due to a fall in its net interest margin. Non-interest income grew 20.8 percent to 69.8 billion won based on a growth in sales commissions coming from selling investment options and insurance products, among others.
This compares with the situation of major local banks, which all saw their non-interest income fall in the same period, due to shrunken investor sentiment. This stems from the "DLF fiasco" in which investors of a certain derivatives product sold at banks saw massive losses.
Citi's return on assets (ROA) and return on equity (ROE) each rose by 0.38 percentage points and 3.39 percentage points to 0.69 percent and 5.83 percent.
"We are seeing solid growth momentum in key projects in corporate finance and retail finance," Citibank Korea CEO Park Jin-hei said in a statement.
SC Bank Korea CEO Park Jong-bok
SC Bank's net profit for the third quarter was 104.2 billion won, up 92.6 percent from 54 billion won from the same period last year. Its accumulated net profit for the first three quarters of the year stood at 254.5 billion won, growth of 26.7 percent year-on-year.
Its ROA and ROE rose by 0.27 percentage points and 4.78 percentage points, respectively to 0.58 percent and 9.21 percent.
SC Bank attributed its performance to the growth of interest income and corporate finance business.
Along with the growth in profit, the banks have been actively seeking to cut costs. One such move is the shutting of branches ― SC closed nine branches this year. Citi meanwhile sold its headquarters building and will complete its relocation process next year, also in a move to save costs.