Combined net profit of South Korean banks’ overseas branches increased 15 percent in 2016 from a year ago, mainly led by a rise in non-interest income, data showed Friday.
According to the Financial Supervisory Service (FSS) on Friday, the combined net profit of local banks’ 178 overseas branches across 40 countries reached $650 million in 2016, up 15 percent, or $90 million, from the previous year. The amount accounts for 26 percent of total net profit raised by local banks last year.
The increase was mainly driven by a surge in non-interest income such as profits from real estate sale and foreign exchange derivative trading. The combined income from non-interest businesses jumped 54.8 percent to $720 million over the cited period - largely attributed by the sale of KEB Hana Bank’s branch building in Hong Kong and recollection of non-performing loans in Brazil.
The combined interest income, meanwhile, increased only 6.4 percent to $1.36 billion over the same period. Of the total $2.08 billion income, net profit came down to $650 million when taking out $750 million selling, general and administrative expenses and $200 million income taxes.
By region, local banks’ overseas branches in Hong Kong posted the largest combined net income of $152.9 million, followed by those in the United States with $75.5 million, and Indonesia with $74.3 million. Overseas branches in Hong Kong saw the largest on-year increase of $40.7 million, followed by Indonesia with $17.9 million.
Overseas branches in Vietnam and the United States, however, saw their net income drop $25 million and $17.5 million, respectively.
Korean banks managed 178 overseas branches in 2016 - eight more from the previous year. Of them, 68.5 percent, or 122 branches, were located in Asia.
By Kim Tae-sung
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]