KB, Hana see overseas biz grow in H1 amid coronavirus

Despite border restrictions placed during the COVID-19 pandemic, South Korea’s major lenders KB Kookmin and Hana posted robust net profit overseas in the first-half of the year, buoyed by their performance in Southeast Asia.

Overall, the combined net profit of four major banks here -- KB Kookmin, Hana, Shinhan and Woori -- in the first-half of the year increased 20.1 percent to 289.2 billion won ($242.9 million), latest data showed.

While KB Kookmin and Hana gained momentum, taking advantage of the Vietnam and Cambodian markets that reopened with the successful containment of the virus in the second quarter, Shinhan and Woori were hit severely by their operations in North America and Europe.

KB Kookmin’s overseas business saw total H1 net profit quadruple on-year to 40.9 billion won. Its operating profit also jumped 300 percent to 305 billion won in the cited period.

Performance by its new Cambodian affiliate Prasac Microfinance -- in which KB Kookmin acquired 70 percent stake worth $630 million in April -- bolstered its overall overseas profit. Prasac Microfinance posted 35 billion won in net profit alone in the first-half of the year. KB Kookmin plans to turn its Cambodian affiliate into a subsidiary after buying the rest of the stake soon.

KB Microfinance Myanmar, the local unit that’s owned 100 percent by bank, posted a net profit of 300 million won after struggling in the red during the first-half of 2019. Its Cambodian and Chinese subsidiaries each saw 32 percent and 1.3 percent gain on-year to 2.6 billion won and 7.5 billion won in net profit in the same period.

Hana’s combined first-half net profit from its overseas businesses jumped 97 percent to 98.8 billion won, while its operating profit gained 28.7 percent to 646.1 billion won in the same period.

Its Chinese subsidiary’s net profit for quadrupled on-year to 57.5 billion won, despite coronavirus risks. Its Indonesian subsidiary saw a six-fold net profit increase, raking in 35.2 billion won in the same period.

Meanwhile, Shinhan’s overseas business saw a combined net profit fall 12.9 percent on-year to 101.2 billion won. While it saw some gains in Cambodia and Kazakhstan, its key businesses in North America saw huge losses. Its US subsidiary Shinhan Bank America posted a net loss of 1.1 billion won and its Canadian subsidiary’s net profit plummeted 74 percent to 400 million won on-year.

Woori Bank dealt similar blows, with total net profit for its overseas business declining 25.5 percent on-year. Its US subsidiary’s net profit nearly halved on-year to 7 billion won, while the lender’s European entity based in Germany posted a net loss of 11 billion won, sinking deeper in the red.

It’s Chinese subsidiary, however, saw its net profit double to 8.6 billion won and its Indonesian subsidiary Woori Saudara Bank’s net profit gained 22.8 percent to 18.8 billion won in the cited period.

The data was released as lenders have been seeking to diversify their revenue sources, as the Korean market has saturated.

Shinhan Financial Group and Hana Financial Group recently signed a deal to jointly expand their global business in an unprecedented move, hinting that the competition overseas has gotten tougher for local lenders during the latest pandemic.

By Jung Min-kyung (mkjung@heraldcorp.com)