Last Year, Domestic Foreign Bank Branches' Net Profit Reached 890 Billion KRW... Up 3.7% Thanks to Foreign Exchange and Derivatives Gains

[Asia Economy Reporter Kim Hyo-jin] The net income of 36 foreign bank branches in Korea last year was 895.3 billion won, an increase of 32.3 billion won (3.7%) compared to 2018 (434.8 billion won), the Financial Supervisory Service announced on the 9th.

Interest income was 994.3 billion won, a decrease of 78.8 billion won (7.3%) compared to the previous year. Gains from securities also decreased by 266.6 billion won (61.3%) from the previous year (434.8 billion won) to 168.2 billion won.

On the other hand, foreign exchange and derivatives gains amounted to 1.121 trillion won, an increase of 330.6 billion won (41.8%) compared to the previous year (790.4 billion won). Due to the rise in exchange rates, there was a loss of 1.2364 trillion won in spot foreign exchange (net selling position), but a gain of 2.3574 trillion won was recorded from derivatives such as forward foreign exchange contracts.

The total assets of foreign bank branches in Korea last year were 305.2 trillion won, an increase of 32.4 trillion won (11.8%) compared to the previous year (272.8 trillion won).

Liabilities increased by 31.5 trillion won (12.3%) to 286.8 trillion won compared to the previous year (255.3 trillion won), and equity capital increased by 800 billion won (4.8%) to 18.3 trillion won compared to the previous year (17.5 trillion won).

A Financial Supervisory Service official stated, "In preparation for the possibility of increased volatility in domestic and international financial markets in the future, we will thoroughly conduct continuous monitoring of vulnerable areas in funding and operations of foreign bank branches, as well as factors affecting changes in profit structures."