Last Year Foreign Banks' Domestic Branch Net Profit 1.5 Trillion Won ... 40% Increase YoY

Last year, foreign bank branches in Korea recorded a net profit of 1.5 trillion won.

According to the "2022 Foreign Bank Branches in Korea Business Performance" report released by the Financial Supervisory Service on the 21st, the net profit of foreign bank branches last year was 1.4941 trillion won, an increase of 40.4% compared to the previous year.

Interest income was 1.613 trillion won, a decrease of 9.3% from the previous year. Although interest expenses on borrowings (variable interest rates) increased rapidly due to rising interest rates, it decreased due to the impact of fixed-rate loans and investments in government and public bonds.

Non-interest income was 1.2931 trillion won, an increase of 149% (773.8 billion won) compared to the previous year. The increase in non-interest income was attributed to derivative-related profits, which reached 9.8717 trillion won, up 90.9% from the previous year.

However, losses in securities and foreign exchange sectors expanded. Securities losses amounted to 2.8 trillion won, with the loss margin expanding by 1.7 trillion won compared to the previous year (-1 trillion won). Bad debt expenses were 49.2 billion won, an increase of 59.7 billion won from the previous year (-10.5 billion won), affected by an increase in non-performing loans.

A Financial Supervisory Service official stated, "We will strengthen risk management related to foreign exchange and derivative transactions and continuous monitoring of vulnerable areas in each bank in preparation for increased domestic and international volatility," adding, "We plan to encourage banks to enhance their loss absorption capacity in anticipation of the realization of potential bad debts."