Loan Assets Decrease but Hold Up Well Amid Interest Rate Hikes
One-Time Large Retirement Costs Also Disappear
Korea Citibank posted a net profit of 150 billion KRW last year. This is attributed to the improvement in net interest margin (NIM) amid high interest rates and the disappearance of the large-scale voluntary retirement impact from the previous year.
On the 30th, Korea Citibank announced that it recorded a net profit of 146 billion KRW last year. It turned to profit from a deficit of 796 billion KRW caused by large-scale voluntary retirement costs due to the withdrawal from retail banking in 2021.
Interest income was 837.4 billion KRW, up 7.3% compared to the previous year. Although consumer finance loan assets decreased, the NIM improved due to the interest rate hike. As of the end of last year, Citibank's loan assets stood at 20.5 trillion KRW, down 16.6% from the previous year. Deposits also decreased by 10.5% during the same period to 25 trillion KRW.
On the other hand, non-interest income was 130.6 billion KRW, down 48.2% from the previous year. This is attributed to decreases in bond, foreign exchange, derivatives income, and asset management income.
However, expenses also decreased significantly. They fell to 656.5 billion KRW, about one-third of the 1.9955 trillion KRW recorded the previous year. This is believed to be due to the elimination of one-time costs related to the phased closure of retail banking, including 1.192 trillion KRW in voluntary retirement costs in 2021.
Additionally, last year's loan loss expenses were 97.5 billion KRW, up 6.4% from the previous year. This was due to increased provisions for loan losses in response to uncertain economic outlooks. The Bank for International Settlements (BIS) capital adequacy ratio and common equity tier 1 ratio were recorded at 20.72% and 19.83%, respectively.
Yoo Myung-soon, CEO of Citibank Korea, said, "We continuously strengthened relationships with users in our core business sector, the corporate finance group, and recorded revenue growth of 45% compared to the previous year," adding, "We are smoothly progressing with the phased closure of consumer finance while implementing plans to protect bank users."
Meanwhile, Citibank held its regular shareholders' meeting at its headquarters in Jongno-gu, Seoul, on the same day and resolved to pay a dividend of 230 KRW per share. The total dividend amounts to 73.2 billion KRW, with half of the total net profit being sent to the U.S. headquarters.
In addition, former BNK Financial Group Vice President Jeong Min-ju, former KB Financial Group Vice President Ji Dong-hyun, and former Korea Credit Information Services President Min Seong-gi were each reappointed as outside directors and audit committee members for a one-year term.
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