Foreign banks` earnings more than triple

SEOUL, Dec. 16 (Yonhap) -- Branches of foreign banks in South Korea saw their earnings more than triple in the first nine months of this year on higher interest income and lower funding costs, the watchdog said Tuesday.
The combined net profit of 54 foreign bank branches reached 1.28 trillion won
(US$947.6 million) in the January-September period, up 253.4 percent from a year
ago, the Financial Supervisory Service (FSS) said.
"Higher interest income came as interest arbitrage transactions and loans
increased and funding costs declined amid falling foreign interest rates," the
FSS 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 1.25 trillion won in the first three
quarters, up 366.1 percent from the previous year, according to the watchdog.
As of the end of September, their total assets reached 315.8 trillion won, up
94.3 percent from a year ago, it added. Their capital adequacy ratio, a key
barometer of financial soundness, came in at 14.74 percent as of end-September,
down from 14.89 percent from the previous year, it said.
sooyeon@yna.co.kr
(END)