SEOUL, May 17 (Korea Bizwire) – Two major foreign banks in South Korea suffered declines in their first-quarter profit due to a lack of growth drivers and declining net interest margins, the companies said Tuesday.
In the three months ending March 31, Standard Chartered Bank Korea posted a 22.6 percent on-year drop in its first-quarter net profit at 29.1 billion won (US$25 million), the British bank said in a statement.
Citibank Korea saw its net income plunge to 36.5 billion won in the first quarter from 110.7 billion won during the cited period last year, the U.S. bank said in a statement.
The net interest margin at Standard Chartered Bank Korea fell to 1.53 percent from 1.87 percent, while the comparable figure at Citibank Korea slid to 2.43 percent from 2.50 percent, the banks said.
In Korea, foreign banks have also joined the local banks’ push to cut costs and jobs and increase loan-loss provisions. They have suffered a weak bottom line in recent years due to lower interest rates and tougher competition with their local rivals.
The country’s key rate stands at an all-time low of 1.50 percent amid growing calls for further rate cuts to support Asia’s fourth-biggest economy. Korea’s economy grew 2.6 percent last year, decelerating from the previous year’s expansion of 3.3 percent.