Korea Citibank Earned Only 90 Billion Won in the First Half of This Year

Net Profit for the First Half of the Year Down 46.9% Year-on-Year

Exterior of the Seoul Center, a wealth management specialist of Citibank Korea, which opened on the 3rd in Jongno-gu, Seoul (Photo by Citibank)

[Asia Economy Reporter Minyoung Kim] Korea Citibank announced on the 14th that it achieved a net income of 30.3 billion KRW in the second quarter of this year. This represents a 72.4% decrease compared to the same period last year (109.5 billion KRW).

Looking at the first half of the year, the bank earned 90 billion KRW, shrinking 46.9% compared to 169.6 billion KRW last year.

Citibank explained that this was due to additional provisions related to the novel coronavirus disease (COVID-19) and the disappearance of temporary gains (76.9 billion KRW in Q2) from the sale of the Dae-dong office building in Jung-gu, Seoul, which took place in the first half of last year.

While interest income decreased in the first half, non-interest income increased significantly. The bank's interest income for the first half was 459.5 billion KRW, down 4.6% from 481.4 billion KRW last year. This was due to the continuous narrowing of the net interest margin (NIM) following the base rate cuts. The bank's NIM for the first half was 2.14%, down 0.23 percentage points from 2.37% in the same period last year.

Supported by Non-Interest Income such as Fees

Non-interest income was 177 billion KRW, up 57.8% from 112.2 billion KRW last year. The increase in profits was driven by gains related to foreign exchange derivatives and increased fees from investment and insurance product sales.

Other operating income recorded a profit of 6.9 billion KRW in the first half, down 92.7% compared to 95.7 billion KRW in the same period last year, due to the disappearance of gains from the sale of the head office building last year and a decrease in government bond trading profits in Q2.

The bank set aside 105.6 billion KRW in provisions in the first half to prepare for financial distress caused by COVID-19 and an increase in personal credit loans. This is a 50.1% increase compared to 70.3 billion KRW in the first half of last year.

The return on assets (ROA) and return on equity (ROE) for the first half were 0.33% and 2.91%, respectively, indicating a slight deterioration in soundness and profitability compared to last year.

As of the end of June, the Bank for International Settlements (BIS) capital adequacy ratio and common equity tier 1 ratio were 18.97% and 18.16%, respectively.

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