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.
Wealth management drives foreign banks' earnings
By Kim Bo-eun
By Kim Bo-eun
Foreign banks posted solid earnings here in the first quarter of this year, in contrast with local banks that saw their earnings fall. The performance of foreign banks is attributed to their wealth management divisions, which continue to see growth in customers and assets under management.
Standard Chartered (SC) Bank Korea posted 93.8 billion won in net profit for the first quarter of this year, a 23.4 percent growth year-on-year, from 76 billion won in the same period of 2019.
The bank said a number of factors contributed to the jump in earnings, including a growth in loan assets and reduction of costs, but that wealth management played a central role.
The number of new customers for wealth management increased by 24 percent at the end of 2019, from the end of 2018. Assets under management grew 2 percent as of April, from the end of 2018. Foreign currency assets grew by 70 percent.
The bank said the number of retail customers for wealth management services has grown based on differentiated overseas investment strategies and innovative services. SC Bank held web seminars that could be accessed via smartphone amid the COVID-19 situation to provide insights into investment strategies.
Citibank's net profit for the first quarter of this year came down to 59.8 billion won, down slightly by 0.5 percent from 60.1 billion won for the same period a year earlier.
The wealth management division at Citi has also played a central role in driving earnings, the lender said.
The bank restructured its wealth management division, setting up a separate advisory team, under which are the research, portfolio counseling and treasury service teams, to provide more systematic and comprehensive services.
The number of new customers for wealth management services grew by 52 percent as of the end of April, compared to the same period a year earlier.
"Based on our efforts to lead the local asset management market, such as setting up a large-scale wealth management center to manage assets on a team basis and implementing a model portfolio system, assets of retail investors have grown 14.46 percent since the end of 2018," said Kim Ji-kang, the director of the lender's retail banking division.
Investors have flocked to foreign banks after local lenders saw their reputation tarnished over a series of scandals that involved mis-selling.
"Investors appear to have become anxious about investment products after these events," an official of a foreign bank said. "We have a strict screening processes for managing assets and check the risks thoroughly."