Korean Banks Earned 2.4 Trillion Won Overseas Last Year, Up 2.3% from Previous Year

Last Year's Net Income of Korean Banks' Overseas Branches Reaches $1.65 Billion
Steady Growth Continues: $1.33 Billion in 2023, $1.61 Billion in 2024
Interest Income Up 4.5%... Non-Interest Income and Credit Loss Expenses Remain Challenges

Last year, domestic banks in Korea earned approximately 2.4 trillion won from their overseas branches. While total profits grew thanks to increased interest income, a decline in non-interest income and higher loan loss provisions due to non-performing loans have emerged as areas for future improvement.

According to the "2025 Management Status and Localization Index Evaluation Results of Overseas Branches of Domestic Banks" released by the Financial Supervisory Service on May 21, net profit of overseas branches of domestic banks last year reached $1.651 billion (approximately 2.4 trillion won at the time of reporting), up 2.3% from the previous year.

The 2.4 trillion won earned from overseas branches accounted for 9.8% of the total net profit of 24.1 trillion won generated by domestic banks both at home and abroad last year. This represents a 0.9 percentage point decline in the share of overseas profit compared to 10.7% in 2024.

Net profit from overseas branches of domestic banks has shown a steady upward trend, increasing from $1.33 billion (about 2 trillion won) in 2023, to $1.614 billion (about 2.4 trillion won) in 2024, and $1.651 billion last year.

Last year, Korean banks earned $3.801 billion (about 5.74 trillion won) in interest income from their overseas branches, a 4.5% increase (or $162.4 million, about 245 billion won) from the previous year. In contrast, non-interest income was only $610 million (about 921 billion won), down 8.3% (or $55 million, about 83 billion won) year-on-year.

Loan loss provisions incurred for asset quality management reached $690 million (about 1.042 trillion won), an increase of 16.2% (or $96.1 million, about 145 billion won) compared to the previous year. Loan loss provisions refer to losses arising from uncollectible loans.

However, this figure is significantly more stable compared to 2023, when credit risk peaked and loan loss provisions reached $1.091 billion (about 1.647 trillion won). Although there was a slight increase year-on-year, considering the base effect, it appears that banks proactively cleaned up non-performing assets at overseas branches, thereby defending overall profitability.

The return on assets (ROA) for overseas branches was 0.71%, down 0.03 percentage points from the previous year’s 0.74%.

By country, net profit increased in Indonesia and the United Kingdom by $105 million (about 158.5 billion won) and $65 million (about 98 billion won), respectively, compared to the previous year. On the other hand, in China, net profit decreased by $86 million (about 130 billion won).

Asset quality indicators showed an improving trend. At the end of last year, the non-performing loan (NPL) ratio—loans overdue for more than three months—at overseas branches of domestic banks was 1.36%, down 0.10 percentage points from 1.46% at the end of the previous year. In particular, asset quality improved significantly in the United States, with a 0.77 percentage point decline from the previous year.

As of the end of last year, Korean banks operated a total of 211 overseas branches in 41 countries, up by four from the previous year. By type, there were 96 branches, 61 local subsidiaries, and 54 representative offices. By country, India had the largest number with 22 branches, followed by Vietnam (20), the United States (17), China (16), and Myanmar (14).

By region, Asian branches totaled 142, accounting for 67.3% of the total, highlighting the banks’ strong focus on southern markets. Europe had 31 branches (14.7%), the Americas had 29 branches (13.7%), and other regions accounted for nine branches (4.3%).

At the end of last year, the total assets of overseas branches of domestic banks stood at $233.1 billion (about 334.5 trillion won), up 7.4% from the end of the previous year. By country, the United States had the largest asset base with $37.6 billion (about 57 trillion won), followed by China ($32.1 billion, about 48 trillion won), and the United Kingdom ($27.5 billion, about 41 trillion won).

Meanwhile, the overall localization index grade for overseas branches remained at "Grade 2+" from the previous year. By country, Cambodian branches recorded the highest localization level with "Grade 1+," and Indonesian branches also received a favorable "Grade 1" evaluation.

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