It has been revealed that the overseas subsidiaries of the top four domestic commercial banks achieved high performances in the third quarter of this year compared to the previous year.
With the lifting of the COVID-19 lockdown in China, KEB Hana Bank and KB Kookmin Bank saw notably significant increases in performance. Shinhan Bank, in particular, drove the growth with a nearly eightfold surge in performance from Shinhan Bank Kazakhstan. While experiencing relatively favorable results in China and Hong Kong last year, Woori Bank was the only one among the top four domestic commercial banks to record reverse growth, primarily due to substantial losses in Brazil and Europe.
According to the quarterly reports disclosed on the Financial Supervisory Service’s electronic disclosure system on Nov. 22, the combined net profit of the top four domestic commercial banks -- KB Kookmin, Shinhan, KEB Hana, Woori -- from overseas subsidiaries in the third quarter of this year amounted to 690.3 billion won (US$529.78 million). This represents a 9.5 percent increase compared to the same period last year when it stood at 630.2 billion won.
Among the individual banks, KB Kookmin Bank raised its net profit from overseas subsidiaries from 27.4 billion won in the third quarter of last year to 49.3 billion won in the same period this year. While it still posted the lowest figures among the top four domestic commercial banks, the bank achieved a high growth rate of 79.7 percent.
KB Kookmin Bank (China) Limited, which recorded a deficit of 8.2 billion won last year, turned a remarkable profit of 25.1 billion won. Additionally, its two subsidiaries in Myanmar -- KB Microfinance Myanmar and KB Bank Myanmar -- saw profits of 400 million won and 2.2 billion won, respectively. However, KB Bukopin, the Indonesian subsidiary often considered a “problematic entity” for KB Kookmin Bank, narrowed its deficit compared to the same period last year, recording a loss of 95.8 billion won despite improvement from the previous year’s loss of 150.5 billion won. The net profit of KB Prasac, the Cambodian subsidiary, also decreased in the third quarter of this year to 117.3 billion won, marking a decline of 60.7 billion won compared to the same period last year when it was 178 billion won.
KEB Hana Bank, which exhibited the second-highest growth rate, also demonstrated a clear improvement in the Chinese market. The net profit of Hana Bank’s overseas subsidiaries, which was 80.7 billion won last year, increased to 106.5 billion won in the third quarter of this year, reflecting a growth of 31.9 percent. Remarkably, KEB Hana Bank (China) Company Limited, which reported a deficit of 1.3 billion won last year, reversed its fortunes this year, achieving a profit of 19.3 billion won.
A majority of KEB Hana Bank’s overseas subsidiaries, such as KEB Hana Bank Canada, KEB Hana Bank (D) AG, Banco KEB Hana Brasil S.A., KEB Hana Los Angeles Financial, KEB Hana Global Finance Limited, KEB HNB RUS LLC, Hana Bancorp, Inc., and Banco KEB Hana Mexico, demonstrated a consistent growth trend throughout the year. However, only PT Bank KEB Hana, the Indonesian subsidiary, witnessed a performance decline of approximately 32 percent, dropping from 31.6 billion won to 28.2 billion won.
Shinhan Bank secured the top spot in overseas subsidiary performance, widening the gap with the second position. The net profit increased from 309.1 billion won in the third quarter of last year to 350.2 billion won this year, marking a 13.3 percent rise. Shinhan Bank Kazakhstan played a notably robust role, experiencing an impressive 8.0-fold increase by leaping from a net profit of 5.6 billion won last year to 44.7 billion won this year. While some countries witnessed a decrease in performance, Shinhan Bank Vietnam counterbalanced this trend by increasing profits from 144.7 billion won to 184.7 billion won, representing a growth of approximately 40 billion won.
In contrast, Woori Bank, ranking second in the industry, was the sole among the top four domestic commercial banks to undergo a decline in net profit from overseas subsidiaries. The net profit for the third quarter of this year amounted to 184.3 billion won, marking a 13.5 percent decrease compared to the same period last year, which recorded 213 billion won.
Although Woori Bank China Limited had already recorded profits in the range of 30 billion won last year, it saw limited benefits from the “reopening.” In contrast, the losses for Woori Bank Brasil and Woori Bank Europe GmbH deepened significantly, with their deficits increasing from 700 million won each last year to the range of 3 billion won in the third quarter of this year.