SEOUL, KOREA - The net profit reaped by Korean banks in their overseas offices during the first half was US$370 million, up 32.1 percent from the same period a year ago. Their return on assets has also increased slightly. But it still fell short of the past three-year average net profit.
The Financial Supervisory Service said that the 160 bank branch offices doing business in 34 countries in the world reported their total assets of $85.95 billion as of the end of June this year, up 10.4 percent from the end of 2013. Their net profit was $370 million, $90 million higher than a year ago. Choi Sung-il, Financial Supervisory Service director responsible for bank supervision, said, "Despite the continuing low-interest rate environment, the banks reduced the allowance for bad debts while increasing the net interest margin in major markets including China to 21.1 percent."
During the first six months of the year, the banks saw their return on assets rise 0.02 percent to 0.66 percent from the last year. The overall return on assets was 0.40 percent. But their profitability is still low comparing to the average for the past three year of 0.93 percent. The return on assets in overseas offices has been on a downward trend from 1.19 percent in 2011 and 0.96 percent in 2012.
A Financial Supervisory Service official said, "Even though the banks' sales performance overseas has improved somewhat, it's not good enough. We will extend the grace period for overseas bank offices to undergo a management performance inspection by three more years and lend support to help them increase their profitability."
Article provided by The Korea Economic Daily
