The overseas branches of South Korean financial institutions reported a 37 percent growth in their combined net profit on-year to nearly $1.3 billion last year, data from the Financial Supervisory Service showed Thursday.

Overall, 79.1 percent of the combined net profit came from branches in Asia. China contributed the most with $252 million, with Hong Kong and Vietnam each tailing behind at $235 million and $157 million, respectively. 

The number of overseas branches operated by the firms increased by six in the same period, standing at 437 in 43 countries as of end-2018. Fifteen branches were newly opened and nine branches were shut down.

The new branches were opened in ASEAN countries, where the Moon Jae-in administration have been making efforts to strengthen ties with in line with its New Southern Policy.

The FSS cited the domestic FIs’ move to expand their portfolio to ASEAN nations with high profitability including Vietnam and Indonesia, behind the robust net profit.

The average return-on-assets in Vietnam and Indonesia stood at 2 percent and 1.4 percent, respectively, which was higher than the corresponding figure for Korean banks, data showed.

As of end-2018, the overseas FI branches’ total assets stood at $179 billion, a 14 percent increase from the previous year.

The FSS vowed to support local FIs’ efforts to expand their portfolio in ASEAN countries, while vowing to streamline the approval process for business permits.

“We will strengthen the communication channels with local regulators through regular meetings,” an official said. 

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