Last Year, Domestic Banks' Overseas Branches Total Assets $133.7 Billion...Net Profit Up 0.4%

[Asia Economy Reporter Kangwook Cho] Last year, the total assets of overseas branches of domestic banks exceeded 130 billion dollars. Net profit remained at a similar level to the previous year.

According to the "2019 Performance of Overseas Branches of Domestic Banks and Localization Index Evaluation Results" announced by the Financial Supervisory Service on the 25th, the total assets of overseas branches of domestic banks reached 133.69 billion dollars, an increase of 18.88 billion dollars (16.4%) compared to the end of the previous year (114.81 billion dollars). This accounts for 5.7% of the total assets of domestic banks (bank accounts, 2,693 trillion won) at the end of last year, up 0.6 percentage points from 5.1% the previous year.

By region, assets of branches located in the New Southern region increased significantly (6.88 billion dollars) due to new entries and business expansion, and major advanced countries also maintained an upward trend. As of the end of last year, the non-performing loan ratio of overseas bank branches was 0.63%, up 0.03 percentage points from 0.60% at the end of the previous year. During the same period, the non-performing loan ratio of domestic banks (provisional) was 0.77%, which was higher.

The net income of overseas branches was 988 million dollars, a 0.4% increase compared to 984 million dollars the previous year. This accounted for 7.9% of the total net income of domestic banks (14.4 trillion won) last year, up 0.9 percentage points from 7.0% the previous year. On the other hand, the return on assets (ROA) decreased by 0.16 percentage points to 0.70% from 0.86% the previous year.

By region, branches in Vietnam recorded the highest net income at 156 million dollars, followed by Hong Kong (149 million dollars) and China (101 million dollars). Except for China, Indonesia, and Hong Kong, all other regions saw an increase in net income compared to the previous year.

Domestic banks operated 195 overseas branches in 39 countries, an increase of 5 branches compared to 190 branches in 39 countries at the end of the previous year. Last year, 8 new branches were established and 3 branches were closed. The locations of newly entered branches were in the New Southern region and Asia, including Japan.

By country, Asia accounted for 135 branches (69.2% of the total), including Vietnam (19), China and India (16 each), Myanmar (14), Hong Kong (11), and Cambodia (10). Other regions operated 27 branches in the Americas (13.8%), 25 in Europe (12.8%), and 8 in other regions (Oceania and Africa) (4.1%).

The Financial Supervisory Service's comprehensive evaluation grade for the localization index of domestic banks' overseas branches rose one level from 2(-) to 2(0). The localization level of overseas branches was rated 1(-), and the internationalization level of headquarters was rated 2(-), both improving by one level compared to the previous year.

By region, the overseas branch localization grade was highest at 1(0) for branches located in Indonesia, followed by 1(-) for the United States and Japan, and 2(0) for China and Vietnam. Most countries maintained the same level as the previous year, with China and the United States each rising by one level.

This content was produced with the assistance of AI translation services.