Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Citibank, SC Bank Korea meet mixed outcomes in Q3
Employees work at the headquarters of Citibank Korea in Seoul in this April 2021 photo. Yonhap
By Lee Yeon-woo
Citibank Korea and Standard Chartered (SC) Bank Korea met mixed outcomes in their third-quarter operations in Korea. Both banks saw notable increases in their interest income due to prolonged high interest rates, yet expenses and the amount of reserve funds created the differing performances.
According to sources in the banking industry, Thursday, Citibank Korea recorded 74.3 billion won ($57.2 million) in its net profit during the third quarter of 2023. It is a significant 21 percent increase compared to the same period last year.
The growth in non-interest income was particularly notable. Its non-interest income saw a 90 percent increase compared to the same period last month. It was largely attributed to increased revenue in foreign exchange, derivatives and securities. Its interest income also saw a 2.3 percent increase during the same period.
The bank said it is also improving cost efficiency following the downsizing of its consumer finance business.
Standard Chartered Bank Korea headquarters in Seoul / Yonhap
In contrast, SC Bank Korea showed a modest performance.
It recorded 104 billion won in its net profit during the third quarter of 2023, a 2.4 percent decrease compared to the same period last year.
Its interest income saw a 10.2 percent increase year-on-year, reaching 986 billion won. Non-interest income also increased to 73.9 billion won, a 36.1 percent rise during the same period, due mainly to improved earnings related to securities.
Despite its growth in both interest and non-interest income, its net profit decreased due to rising costs, including personnel expenses, and higher provisions for credit losses.
The total accumulated administrative and selling expenses, including personnel costs, rose 14.4 percent compared to the same period in the previous year, when it stood at 628.3 billion won. This rise was largely influenced by increased personnel costs due to wage hikes.
In particular, the amount for reserve funds was notable. For the third quarter, it accumulated to 147.2 billion won, more than doubling the amount from the same period last year.
The bank attributed this significant increase to the need to cushion against domestic and international uncertainties, as well as preparations for credit rating downgrades of particular corporate borrowers.