Citibank Korea’s H1 net profit more than doubles on-year

Global banking giants’ South Korean units saw their first-half earnings led by non-interest income and business expenditures. Citibank Korea’s net profit for the period more than doubled from a year earlier, thanks to surging gains from financial products sales. In contrast, Standard Chartered Korea’s net profit for the first half slightly fell due to rising expenses.

Citibank Korea on Monday posted 177.7 billion won ($132.8 million) in its first-half net profit, 2.3 times the result from a year earlier. The Korean subsidiary of Citigroup Inc. said the sales of bonds, derivatives and foreign exchange boosted its non-interest income in the first half, which surged by 2.1 times to 149.5 billion won on-year.

The bank’s interest income rose 7.3% to 436.5 billion won for the first six months despite its phasing out of consumer banking operations. Although its consumer loans fell 15.7% on-year to 17.2 trillion won as of June 30, its net interest margin (NIM) improved and backed the interest income, the bank added.

The Korean unit of Citigroup reduced expenses, such as labor costs, by 5% on-year to 300 billion won.

Standard Chartered Korea reported on Aug. 14 a 209.2 billion won net profit for the first-half period, down 1.4% on-year. Increased expenses and provisions offset the rise in income, the bank said.

It logged 671.6 billion won in interest income for the first six months, up 15% on-year thanks to the interest rate hikes. The bank said non-interest income in the same period reached 137.1 billion won, rising 32.1% from a year earlier, backed by robust performance of foreign exchange derivatives.

The bank said the first-half expenses had reached 73.9 billion won, up 18.2% from a year earlier due to increased labor costs. Its provisions hiked 82.1% on-year to 86.3 billion won amid worsening economic woes.

Write to Eui-Jin Jeong at justjin@hankyung.com

Jihyun Kim edited this article.