Local Retail Banking
The performance of foreign banks in retail banking has shrunk. Standard Chartered Bank Korea (SCBK) in particular has seen its performance in retail banking plunge to nearly a quarter.
According to the Financial Supervisory Service, as of the end of the first half of the year the consolidated net profit of SCBK stood at 10.3 billion won (US$9.19 million) in retail banking, plunging by 88.9 percent, or 81.8 billion won (US$73.04 million), compared to that in the first half of last year.
Even if SC Savings Bank and SC Capital were sold in the first half of last year, SC First Bank also saw its pre-tax profit fall by 75.2 percent, or 31.1 billion won (US$27.77 million), based on the individual financial statements compared to 41.4 billion won (US$36.97 million) in the same period of last year.
During the same period, corporate banking profit rose by 48.5 percent, or 36.6 billion won (US$32.68 million), while commercial bank income reduced by 23 percent, or 9.6 billion won (US$8.57 million). Retail banking includes extending and receiving credit for individual clients, and the credit card business. Corporate banking involves extending and receiving credit as well as foreign exchange dealings for corporations and institutions, and commercial banking includes performances in extending and receiving credit for local small and medium-sized enterprises.
From early this year, SCBK, jointly with Shinsegae, has installed small branches available regardless of weekdays and holidays at E-Mart and released a joint brand card with the major “monoline” credit card issuer Samsung Card. Retail banking is expected to gain its growth momentum from those actions. Its interest incomes, however, have sharply dropped, causing a downfall in performance.
SCBK posted interest profits of 242.4 billion won (US$216.46 million) in the first half of the year based on individual financial statements, down by 22.4 percent, or 70.1 billion won (US$62.59 million), from the same period a year ago. And the commission profits fell by 28.5 percent, or 13 billion won (US$11.6 million), over the same period.