Foreign bank branches' H1 earnings more than quadruple

SEOUL, Oct. 2 (Yonhap) -- Foreign bank branches in South Korea saw their earnings more than quadruple in the first half from a year ago mainly because their investment in local bonds boosted interest income, the watchdog said Thursday.

The combined net profit of 39 foreign bank branches reached 1.02 trillion won
(US$856.6 million) in the January-June period, up sharply from 329.7 percent a
year ago, the Financial Supervisory Service (FSS) said.
"Interest income shot up mainly because a rise in arbitrage opportunities
prompted foreign bank branches to snap up local government bonds," the watchdog
said.
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.
The combined interest income amounted to 847.1 billion won in the first half, up
333.1 percent from the previous year.
As of the end of June, their total assets reached 225.6 trillion won, up 56
percent from a year earlier, it added.