Foreign bank branches' assets, profits jump in H1

SEOUL, Sept. 23 (Yonhap) -- Foreign bank branches in South Korea saw their assets and profits sharply increase in the first half from a year earlier as a rise in arbitrage opportunities prompted them to snap up local government bonds, sources said Tuesday.
A total of 10 foreign bank branches with more than 10 trillion won in assets saw their combined assets reach 157.8 trillion won (US$138.8 billion) as of the end of June, up 62.6 percent from the previous year, according to the sources.
The combined net profit amounted to 579.1 billion won in the January-June period, sharply up 663 percent from a year earlier.
The rises came as foreign bank branches invested in the local bond market in a bid to pursue arbitrage profits after borrowing money from their overseas parent banks and converting it into the won in the swap market.
"Arbitrage opportunities for foreign bank branches increased this year as the local swap market was unstable," a bank official said.
In terms of assets, the Seoul branch of British bank HSBC Holdings Plc posted the biggest total with 26.6 trillion won, followed by that of Dutch lender ING Bank with 21.6 trillion won.
As of the end of June, the Seoul operations of JPMorgan Chase & Co. logged a net profit of 198 billion won, compared with 3.6 billion won a year ago.
Currently, a total of 39 foreign bank branches are operating in South Korea.