SC, Citi focus on wealth management, digital services
By Park Hyong-ki
Two foreign-invested commercial banks saw their profits drop in the first half of this year, compared to the previous year.
This was in stark contrast to local banks, which enjoyed high profits on increased interest incomes.
Both Standard Chartered (SC) Bank Korea and Citibank Korea said the main reason behind it was they had to boost their risk management by increasing their provisions against potential customer defaults on some of their investment portfolios.
This increased costs, which weighed down their bottom lines, they added.
SC Bank's net profit stood at 146.7 billion won in the first half, down 24.5 percent from a year ago, it said in a press statement. Meanwhile, Citibank's net profit reached 117 billion won, down 0.1 percent in the same period.
"The costs went up as the bank had to increase provisions against potential customer losses on investment in derivatives," a SC Bank spokesman said.
The increase in provisions was in line with the "conservative" accounting standards of the IFRS 9. Last year, the bank did not have to increase its provisions as much as this year as it saw an increase in repayments of loans. This year, it was the opposite.
However, SC Bank's net interest income reached 754.8 billion won, up more than 14 percent, the spokesperson noted.
Citibank Korea also said it had to increase its provisions much more than last year to better manage risks. It did not disclose what specific assets against which it has set aside funds for possible losses.
Citibank's net interest income stood at 533.3 billion won in the first half, up 0.8 percent from the same period a year earlier.
Wealth management, digital
SC Bank and Citibank said they will continue to focus on boosting wealth management and digital businesses for their customers.
The Citibank spokesperson said, "Nothing much has changed from last year's plan. We will push forward with wealth management and digital services."
Last year, it has downsized and consolidated the number of its branches from 126 to 36 as part of its efforts to focus on those two services.
SC Bank Korea also said it will continue to strengthen what it is best at ― corporate financing and wealth management ― and further shape up and boost its digital services.
"Our biggest strengths are global capabilities based on our global network of Standard Chartered Group, and a solid local business base built over 80 years," SC Bank Korea CEO Park Jong-bok said in a press statement.
SC Bank Korea noted it will spur wealth management, corporate financing and digital services as the main pillars of the bank using its global resources.
By Park Hyong-ki
Two foreign-invested commercial banks saw their profits drop in the first half of this year, compared to the previous year.
This was in stark contrast to local banks, which enjoyed high profits on increased interest incomes.
Both Standard Chartered (SC) Bank Korea and Citibank Korea said the main reason behind it was they had to boost their risk management by increasing their provisions against potential customer defaults on some of their investment portfolios.
This increased costs, which weighed down their bottom lines, they added.
SC Bank's net profit stood at 146.7 billion won in the first half, down 24.5 percent from a year ago, it said in a press statement. Meanwhile, Citibank's net profit reached 117 billion won, down 0.1 percent in the same period.
"The costs went up as the bank had to increase provisions against potential customer losses on investment in derivatives," a SC Bank spokesman said.
The increase in provisions was in line with the "conservative" accounting standards of the IFRS 9. Last year, the bank did not have to increase its provisions as much as this year as it saw an increase in repayments of loans. This year, it was the opposite.
However, SC Bank's net interest income reached 754.8 billion won, up more than 14 percent, the spokesperson noted.
Citibank Korea also said it had to increase its provisions much more than last year to better manage risks. It did not disclose what specific assets against which it has set aside funds for possible losses.
Citibank's net interest income stood at 533.3 billion won in the first half, up 0.8 percent from the same period a year earlier.
Wealth management, digital
SC Bank and Citibank said they will continue to focus on boosting wealth management and digital businesses for their customers.
The Citibank spokesperson said, "Nothing much has changed from last year's plan. We will push forward with wealth management and digital services."
Last year, it has downsized and consolidated the number of its branches from 126 to 36 as part of its efforts to focus on those two services.
SC Bank Korea also said it will continue to strengthen what it is best at ― corporate financing and wealth management ― and further shape up and boost its digital services.
"Our biggest strengths are global capabilities based on our global network of Standard Chartered Group, and a solid local business base built over 80 years," SC Bank Korea CEO Park Jong-bok said in a press statement.
SC Bank Korea noted it will spur wealth management, corporate financing and digital services as the main pillars of the bank using its global resources.
