Foreign bank branches' net profits spike in 2018

By Kim Bo-eun

The combined net profit of 38 branches of foreign banks operating in Korea surged 27.4 percent to 867.3 billion won ($765 million) in 2018 from a year earlier, data from the Financial Supervisory Service (FSS) showed Tuesday.

Their net profit reached 1,122.3 trillion won in 2015 but decreased to 761.5 billion won in 2016 and 680.7 billion won in 2017.

Last year's handsome performance was attributed to an increase in income from interest and trading, including securities-related, foreign exchange and derivatives-related income.

Interest income grew 1.1 percent to 1.07 trillion won.

The return from securities business turned positive last year, coming to 461.5 billion won. This was due to growth in securities trading caused by a fall in interest rates.

All branches posted a surplus in 2018, the data showed.

Their combined assets last year jumped 5.4 percent to 274.5 trillion from 2017 on an increase in cash and deposits, as well as securities such as loans.

Their debt grew 5.6 percent to 256.9 trillion won last year, while shareholder equity increased 2.8 percent to 17.6 trillion won.

Foreign banks have been downscaling here, with Goldman Sachs, the Royal Bank of Scotland, Banco Bilbao Vizcaya Argentaria, Barclays and UBS shutting branches in recent years.

The FSS said it would bolster monitoring of foreign banks according to volatility in domestic and overseas financial markets.