Korean banks see H1 profit overseas
DESPITE border restrictions placed during the Covid1 9 p a n d e mi c , S o u t h Korea’s major lenders KB Kookmin and Hana posted robust net profit overseas in the first-half of this year, buoyed by their performance in Southeast Asia.
Overall, the combined net profit of four major banks in South Korea – KB Kookmin, Hana, Shinhan andWoori – in the first-half of this year increased 20.1 per cent to 289.2 billion won ($242.9 million), the latest data showed.
While KB Kookmin and Hana gained momentum, taking advantage of the Cambodian and Vietnamese markets that reopened with the successful containment of the virus in the second quarter, Shinhan and Woori were hit severely by their operations in North America and Europe.
KB Kookmin’s overseas business saw total first-half net profit quadruple year-on-year to 40.9 billion won. Its operating profit also jumped 300 per cent to 305 billion won in the period.
Performance by its new Cambodian affiliate Prasac Microfinance Institution Ltd – in which KB Kookmin acquired a 70 per cent sta ke worth $ 630 million in April – bolstered its overa ll overseas profit.
Prasac posted 35 billion won in net profit alone in the first-half of this year. KB Kookmin plans to turn its Cambodian affiliate into a subsidiary after buying the rest of the stake soon.
KB Microfinance Myanmar Co Ltd, the local unit that’s owned 100 per cent by bank, posted a net profit of 300 million won after struggling in the red during the first-half of last year.
Its Cambodian and Chinese subsidiaries each saw 32 per cent and 1.3 per cent gain year-on-year to 2.6 billion won and 7.5 billion won in net profit in the same period.
Hana’s combined first-half net profit from its overseas businesses jumped 97 per cent to 98.8 billion won, while its operating profit gained 28.7 per cent to 646.1 billion won in the same period.
Its Chinese subsidiary’s net profit for quadrupled year-on-year to 57.5 billion won, despite coronavirus risks. Its Indonesian subsidiary saw a six-fold net profit increase, raking in 35.2 billion won in the same period.
Meanwhile, Shinhan’s overseas business saw a combined net profit fall 12.9 per cent year-on-year to 101.2 billion won. While it saw some gains in Cambodia and Kazakhstan, its key businesses in North America saw huge losses.
Its US subsidiary Shinhan Bank America posted a net loss of 1.1 billion won and its Canadian subsidiary’s net profit plummeted 74 per cent to 400 million won year-on-year.
Woori Bank dealt similar blows, with total net profit for its overseas business declining 25.5 per cent yearon-year. Its US subsidiary’s net profit nearly halved year-on-year to seven billion won, while the lender’s European entity based in Germany posted a net loss of 11 billion won, sinking deeper in the red.
Its Chinese subsidiary, however, saw its net profit double to 8.6 billion won and its Indonesian subsidiary Woori Saudara Bank’s net profit gained 22.8 per cent to 18.8 billion won in the cited period.
The data was released as lenders have been seeking to diversify their revenue sources, as the Korean market has saturated.
Shinhan Financial Group and Hana Financial Group recently signed a deal to jointly expand their global business in an unprecedented move, hinting that the competition overseas has gotten tougher for local lenders during the latest pandemic.