The Korea Federation of Banks on Sunday expressed hopes for local commercial banks’ annual offshore net income from financial branch network operations and investments to mark a record this year.
In the first half of 2018, four Korean commercial banks -- Shinhan, Woori, KEB Hana and KB Kookmin -- logged 527.2 billion won ($471.4 million) in net profits from offshore branches and investments overseas through investment banking and assets management.
The figure soared 5 percent from the first half of 2017, mainly on the back of a 20 percent rise in overseas branches’ net income, which totals 77.1 billion won. Profit from overseas network operations outpaced decreased net profit from investment into foreign shares, which dropped 44.4 percent in the first half.
While hailing the banks’ efforts to localize financial business, the KFB said the four banks’ yearly overseas net income is expected to top a combined 1 trillion won by the end of 2018 for the first time.
This came as the financial institutions in Korea have for years moved to secure new growth engines in emerging markets such as in Southeast Asia.
Both the four commercial banks’ overseas profitability and volume of their branch networks have been on a steady rise. The annual net income of the four commercial banks jumped 25 percent in two years to 865.1 billion won in 2017. From 2015 to 2017, the combined net profit from overseas business took up 14.2 percent of the total.
Also in two years through 2017, the number of foreign units -- comprising corporations, branches and offices -- of all Korean banks rose 8.8 percent to 185, while among all the number of those located in Asian countries came to 129, according to the Financial Supervisory Service. The total assets of all offshore units soared 18.8 percent to $104.9 billion.
By Son Ji-hyoung