Twelve Korean banks see brisk earnings in Vietnam in 2018, according to data from the Financial Supervisory Service (FSS), Tuesday.
The banks’ net incomes in the region more than doubled from $61 million in 2017 to $131.8 million in 2018. Koreatimes reports.
Shinhan Bank Vietnam made the biggest contribution to the lenders’ overall growth there as it posted nearly 100 billion won ($88 million) in net profit last year.
Their combined net income in Singapore also grew by 17.2 percent in 2018; while assets also grew in Vietnam and Indonesia.
The banks’ profits from business in Vietnam grew from $5.72 billion in 2017 to $6.43 billion in 2018; and in Indonesia from 5.76 billion to $6.34 billion.
In 2018, the twelve Korean banks were operating in 39 countries through 55 subsidiaries, 77 branches and 57 offices, and most of their overseas operations, or nearly 70 percent were concentrated in Asia.
New openings were also concentrated in the region ― out of seven, four were opened in Cambodia and one in Bangladesh.
“We continue to see increasing profits in Asia,” an FSS official said. “The scale of assets in the region is not very great compared to that of other larger economies but continues to grow.”
Shinhan Bank said its stellar growth in Southeast Asia, especially in Vietnam, was due to its well-executed strategy and services tailored to local customers.
“We believe it’s due to localization strategies, as the bank has focused securing local customers, hiring local employees and local executives, and increasing the percentage of local assets,” a Shinhan Bank official said.
The FSS assessed the banks did better in terms of localization in 2018 than a year earlier.
According to the FSS, the total asset volume of overseas businesses came to $114.25 billion, up 8.9 percent from a year earlier. The banks’ overseas businesses reported a net income of $983 million for 2018, up 22.2 percent from a year earlier. This was due to considerable increases in interest and non-interest incomes.
Meanwhile, FSS First Senior Deputy Governor Yoo Kwang-yeol is in Southeast Asia for meetings with his regulatory counterparts to discuss Korean financial companies’ businesses there.
He was in Jakarta Monday and will hold meetings in Hanoi Wednesday and Thursday.
This is the first visit by members of the FSS management in four years ― the last took place in 2015 under then governor Zhin Woong-seob.
An FSS official said “There is a lot more to discuss with our counterparts there because the presence of Korean finance companies in the region has grown significantly over the past years.”
By Kim Bo-eun