Seoul: PonteSud – News Desk
South Korean banks earned about $1.6 billion in net profit from overseas locations last year, up 21.3% from a year earlier, driven by stronger margins, the Financial Supervisory Service said Friday.
According to the FSS’ annual report on overseas banking operations, offshore profit accounted for nearly 10% of the sector’s total net income of 22.2 trillion won , $16.25 billion, up from 8.2% in 2023.
Profits from foreign locations have climbed steadily, rising from $991 million in 2022 to $1.33 billion in 2023, and surging 63% over two years to $1.61 billion in 2024.
The FSS attributed the improved performance to a reduction in distressed assets. Loan-loss expenses fell 45.6% on-year to $594 million, supporting the surge in net profit despite a $16 million decline in combined interest and non-interest income. The substandard loan ratio also improved, dropping to 1.46% from 1.74%.
By region, profit growth was led by operations in the US and Singapore, where net income rose by $229 million and $49 million, respectively. In contrast, earnings declined in Indonesia and China, falling by $56 million and $27 million.
The total number of overseas locations rose by four from a year earlier to 206. Of these, 92 were branches, 60 were local subsidiaries and 54 were non-operating offices.
Asia accounted for the largest share at 68%, followed by the US at 14.1% and Europe at 13.6%. By country, Vietnam and India each hosted 20 locations, followed by the US with 17 and China with 16.
Total assets held by overseas entities rose 3.3% on-year to $217 billion, led by the US with $35.8 billion, followed by China with $31.8 billion and Hong Kong with $24.7 billion.
The average localization rating remained at Level 2, with entities in Cambodia achieving the highest score of Level 1. Operations in Indonesia, Japan and the Philippines also performed strongly, each rated at Level 1. The localization index is rated from Level 1 to 5. The closer to Level 1, the higher the localization level.
