Go to Contents Go to Navigation

Foreign bank branches' net rises 3.5 pct on derivatives

All Headlines 06:00 March 08, 2016

SEOUL, March 8 (Yonhap) -- Foreign bank branches in South Korea posted a 3.5-percent on-year gain in their combined net profit last year aided by an increase in derivative investment gains amid a strong dollar, the financial regulator said Tuesday.

For the whole of 2015, 39 foreign banks operating here reported a preliminary net income of 1.130 trillion won (US$939 million) from 1.091 trillion won a year earlier, the Financial Supervisory Service (FSS) said in a statement.

Banks headquartered in the United States and Europe saw their overall net profit climb 85.5 billion won last year compared to the previous year, while Asia-based lenders suffered a decline of 46.6 billion won, it said.

"U.S. and European banks have a policy of investing in foreign-exchange and derivatives products on top of the traditional loan and interest-seeking business. But Asian banks from Japan and China focus on extending loans and interest income," said FSS official Choi Young-jin, who handles the data.

"The dollar's strength against other currencies, including the won, drove up investment gains in those products last year." The dollar rose to 1,172 won at the end of 2015 from 1,099 won a year earlier, according to the FSS.

Investment gains from foreign-exchange and derivatives products more than quadrupled to 576.8 billion won in 2015 from 139.6 billion won the year before, the statement said.

In Korea, banks have been struggling with low growth and low margins since the 2009 financial crisis. Foreign lenders' interest income fell 16 percent on-year to 1.536 trillion won last year, it said.

kyongae.choi@yna.co.kr
(END)

HOME TOP
Send Feedback
How can we improve?
Thanks for your feedback!