Foreign investment banks and asset management companies are paying huge dividends that surpass their net profits or remitting a large amount of profit to their headquarters overseas.

Standard Chartered Bank Korea paid a dividend of 100 billion won ($87.1 million) this year to Standard Chartered Korea, the 100 percent shareholder of the bank. Dividend per share was 381 won. The dividend was the same amount as last year although the bank’s net profit decreased by 21 percent to about 255 billion won, thus increasing the payout ratio by 16.1 percent to 78.1 percent.

The bank has been paying a high dividend since 2010 when it paid 250 billion won in March and 100 billion won in September. In both March and September last year it paid 100 billion won each.

“Dividends are decided by multiple factors, and they should be considered as well before judging whether the dividend was too much or not,” said a PR official at Standard Chartered Bank Korea.

Credit Suisse sent 200 billion won earlier this year to its main headquarters. The bank raised a net profit of 119.9 billion won last year, so the payout ratio is estimated to be about 167 percent.

Citibank Korea also paid nearly 130 billion won last year, its biggest-ever interim dividend, to Citigroup Korea, according to the bank’s audit report. Dividend per share was 428 won.

“The remittance overseas was KRW87Bn which was less than 20% of net income. We have the strongest capital ratios among our peers.”  said a PR official at the bank.

Market insiders, however, point out that it would have looked better if such foreign firms hire more local employees or reinvest the profits.

“The market is not so fond of how their main offices take away most of the profits without contributing something to the market here,” said a market insider who wished to stay anonymous.

In a slightly different case, leading global investment bank Goldman Sachs’ Seoul branch gained media attention for sending over 270 billion won to its headquarters office early this month.

Although KoFIA categorized the figure as a dividend, which would make the payout ratio reach nearly 684 percent, a PR official for the U.S.-based bank said that the amount was not a dividend but the net profit accumulated since 2006.

“It is a natural process for branches of foreign companies in Korea to send what it earned to the headquarters and bring what it needs. Goldman Sachs has also been investing in the Korean market by increasing capitalization of Goldman Sachs Asset Management,” said an official at Goldman Sachs.

The investment bank, which marked a loss of 37 billion won in 2011, raised a net profit of 39.9 billion won this year.

Foreign asset management companies are also taking home most of what they earned here, according to KoFIA.

Schroders Korea Limited recently paid a dividend of 10 billion won which is almost 100 percent of its net profit (10.6 billion won) from April 2011 to March this year. Kyobo Investment Trust Management, which earned 4.17 billion won last year, displayed about the same payout ratio as well by paying the dividend of 4.14 billion won.

Allianz Global Investors Korea Limited paid the total dividend of 12 billion won this year, which is about 75 percent of its net profit last year (15.9 billion won). The company doubled the dividend as the net profit increased by around 78 percent compared to last year, according to reports.

By Park Min-young (claire@heraldcorp.com)