Citi rises, SC falls in 2015 earnings

By Kim Jae-won

Two foreign lenders operating in Korea showed sharp differences in comparative earnings last year, after Citibank Korea posted 225.7 billion won of net profit while Standard Chartered Bank Korea (SCBK) marked a net loss worth 285.8 billion won, the banks reported Thursday.

Market watchers said that Citi has posted handsome profits for more than a decade since acquiring KorAm Bank in 2004 thanks to its strong corporate banking and wealth management.

But SCBK has faced turbulence here for the last decade since buying Korea First Bank in 2005, failing to get support from the labor union, according to analysts. They said that the lender also had difficulties in expanding its retail banking business which was hit hard by bigger local players, such as KB Kookmin, KEB Hana, Shinhan and Woori, which dominate the domestic market.

Citibank Korea said that its net income increased 95.3 percent in 2015 from the year before because its expenses dropped 23.3 percent to 830.3 billion won and its loan loss provisions and other allowances plunged 67.9 percent to 44.7 billion won during the same period.

But its total revenue tumbled 11.1 percent to 1.2 trillion won in 2015 from the previous year, with its net interest revenue going down 11.8 percent to 1.1 trillion won and its net non-interest revenue dwindling 39.4 percent to 64 billion won.

Its CEO Park Jin-hei said that the lender will increase its growth this year by tightening internal controls and strengthening its digital business. “In 2016, we will focus on pivoting for further growth, enhancing internal controls and improving our digital competitiveness,” said Park in a statement.

SCBK said that it posted a net loss of 285.8 billion won last year due to a one-time expense of 494.3 billion won for employees who applied for an early retirement program. Excluding the cost, the lender marked an operating profit of 80.5 billion won, according to SCBK.

SCBK CEO Park Jong-bok said that the bank is improving its efficiency by cutting costs. He also said that its assets are becoming more resilient to risks thanks to the lender’s thorough risk management.

“We are changing to healthier,” said Park in a statement. “We will focus on increasing profits by improving digital platforms and strengthening our alliances with other industries for one or two more years.”