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    Korea
     Apr 13, 2006
Foreign bank earnings drop

SEOUL - Earnings by foreign bank branches in South Korea more than halved in 2005 from a year earlier due to sharp investment losses from stock trading, the nation's top financial watchdog said Wednesday.

The 32 branches posted a combined net profit of 86 billion won (US$90 million) last year, down 68.7% from 188.5 billion won in 2004, according to the Financial Supervisory Service (FSS).

"The branches recorded losses from their short-term stock trading due to unexpected interest rate rises in 2005," the watchdog said.



"A rise in bad debt expenses also contributed to the fall."

Nine bank branches reported losses, while the others were in the black, the regulator said.

The South Korean branch of Boston-based State Street Bank posted the largest net profit worth 28.5 billion won, followed by the branches of Swiss UBS and French Calyon with 19.6 billion won and 11.8 billion won, respectively. London-based HSBC, on the other hand, reported a loss of 5.5 billion due to investment losses.
The branches' return on assets came to 0.1% last year, compared with 1.26% for South Korean banks. The return on assets is one of measures for a bank's profitability.

Their combined assets reached 96 trillion won, while their market share came to 7.5%, the FSS added.

(Asia Pulse/Yonhap)

 

 
 



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