이 기사는 2021년 10월 29일 07:30 thebell 에 표출된 기사입니다.

Earnings of Industrial Bank of Korea (IBK)’s Chinese and Southeast Asian units have rebounded as the banking industry recovers from the impact of the Covid-19 pandemic with increasing vaccinations.

The state-funded bank said in its third-quarter earnings release on Wednesday that its Chinese unit's net profit increased tenfold year-over-year to 8.1 billion won ($6.9 million) in this period, with a year-to-date net profit of 18.3 billion won.

IBK has built the so-called “Asia’s financial belt” linking key Asian markets such as China, Indonesia, Vietnam, the Philippines and Myanmar in order to support South Korean small and mid-sized companies operating in overseas markets. Its Chinese unit, which was established in June 2009, has 16 branches across the country.

Before the pandemic hit last year, IBK’s Chinese operations recorded a net profit of about 20 billion won each year. Its net profit slightly declined to 17.5 billion won in 2018 due in large part to a decrease in its wholesale profit in the aftermath of the trade war between the US and China.

The net profit rebounded to 24.8 billion won in 2019 as the trade tension between the two countries eased. But the unit’s 2020 net profit nosedived again to 9.1 billion won due to the coronavirus-induced lockdowns.

The Chinese operations have started to recover this year as vaccinations rise, with the unit’s third-quarter net profit surging to more than 8 billion won from about 5 billion won in the first and second quarter.

IBK’s Indonesian unit was established in September 2020. While it is still in the red, it is expected to turn profitable next year as its operating profit is on the rise.

The Indonesian operations recorded a net loss of 13 billion won in the first nine months of 2021, an improvement from 39.4 billion won in 2020. The unit recorded operating losses of 13.2 billion won in 2019 and 30 billion won in 2020. But it swung to an operating profit of 117 billion won in the first quarter this year, and recorded 24.9 billion won in operating profit in the second quarter. The third-quarter operating profit has not been disclosed yet.

It is likely that the Indonesian unit will remain unprofitable this year in terms of net income, especially considering that the first three years of overseas operations typically require a large amount of investment to build business infrastructure. However, the unit is expected to turn to net profit next year.

IBK earlier this year established its overseas operations in Myanmar, where many South Korean financial services firms started to turn their eye as they seek to benefit from the country’s fast economic growth.

However, Myanmar was hit by both the outbreak of the pandemic and a military coup staged in February this year. IBK’s operations there reported a net loss of 1.7 billion won in the first half of this year and a 700 million net loss in the third quarter.

“Our Chinese operations have rebounded compared to last year, largely thanks to an increase in interest income,” an IBK official said. “The Indonesian unit was launched only last year, so more investments are needed.” (Reporting by Gyu-hee Kim)