Overseas Banking Operation

The Financial Supervisory Service (FSS)
The Financial Supervisory Service (FSS)

 

The Financial Supervisory Service announced on October 5 that South Korean banks’ overseas branches recorded a total current net income of US$311.6 million in the first half of this year, down 17.5% from a year ago, and their interest income and non-interest income increased 3.8% and decreased 0.7% to US$668.8 million and US$268.9 million during the period, respectively. Their allowance for bad debts soared by 47% from a year earlier to US$164.1 million, directly affecting the current net income.

The Financial Supervisory Service explained that the rapid decline in their current net income can be attributed to the ongoing global economic recession and losses derived from Hyundai Merchant Marine.

Korean banks’ current net income fell 7.2% in the United States, 14.6% in China and 1.6% in Hong Kong with the global economic recession causing some of their loans in these major markets to turn into non-performing loans and their allowance for bad debts to increase. Those in Britain, in the meantime, had to boost their allowance due to losses relating to Hyundai Merchant Marine and face a net loss. The current net income dropped by 50.3% in Vietnam and by 55.2% in Japan as well, led mainly by mortgage loan losses.

Those overseas branches’ total asset edged up by 0.6% to US$88.86 billion between the end of last year and the end of the first half of this year. During the same period, the number of South Korean banks’ overseas branches increased by three to 173 in 39 countries. Their ratio of non-performing loans went up by 0.2 percentage points to 1.3%. 

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