Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Banks reporting dismal earnings in Myanmar
Protesters hold the Myanmar Student Union flag during a demonstration against the military coup in Mandalay on May 17. AFP-Yonhap
By Lee Min-hyung
By Lee Min-hyung
Korean banks have reported dismal earnings in Myanmar, a widely-expected result in the wake of the country's widening chaos amid the military take over and massive crackdown on its people who oppose the junta, with the Industrial Bank of Korea (IBK) Bank Myanmar hit hardest by the brutal violence there.
The lender opened its office Jan. 21, but failed to engage in normal activities amid the turmoil that the military is wreaking on the population. The bank reported a net loss of 807 million won ($715,000) for the first three months this year.
Most other lenders have not yet released specific earnings for the first quarter, but they are expected to have generated disappointing profits, as the internal conflict continues to escalate at a worrying level ― no Korean banks have resumed normal business operations so far.
KB Kookmin Bank chalked up operating revenue of 1.48 billion won during the first quarter, down 6 percent from the previous year. This is a noteworthy drop, compared to a year ago, as the lender reported first-quarter growth of more than 100 percent in 2020 from the previous year.
Of much more concern is that Korean lenders will likely see their losses mount in the country in the second quarter and possibly throughout the year.
“Banks will have to suffer losses for their paralyzed business activities in the country, as the military crackdown there shows little sign of subsiding as of now,” an industry official said.
“Banks are in a state of deadlock and cannot even push for an exit strategy in the market for the time being. This is because it wasn't until recently that most of them opened their offices there. They have no choice but to keep track of whether the political uncertainty keeps escalating.”
Two other top-tier banks ― Shinhan and Woori ― also tapped into the market to seek new revenue sources amid toughening domestic rivalry here. They are raising their monitoring of the regional unrest, but said that they do not have any plans to withdraw from their businesses there.