The South Korean branches of foreign banks held a combined 305.2 trillion won ($250.9 billion) in assets last year, 11.8 percent increase from the previous year, mainly due to derivative products and securities, latest data showed Thursday.

The increase was mainly attributable to their derivative product assets which rose by 14.3 trillion won, according to the Financial Supervisory Service in its report on 36 foreign banks here. Their securities and cash and deposits also increased by 7.7 trillion won and 400 billion won, respectively.

Their combined net income marked 895.3 billion won, up 32.3 billion won, or 3.7 percent, from a year prior over foreign exchange and derivatives gains.

Meanwhile, their interest earnings declined 7.3 percent from 1.07 trillion won in 2018 to 994.3 billion won last year. Their securities profits reached 168.2 billion won, down 266.6 billion won, or 61.3 percent, on-year.

Profits from foreign exchange derivative transactions, however, rose 330.6 billion won to 1.12 trillion won. As the Korean won weakened against the US dollar, the spot exchange resulted in transaction losses, but banks made profits from futures trading last year.

Moreover, foreign lenders’ debts rose 31.5 trillion won to 286.8 trillion won. It was attributed to increasing debts in derivative products, loans and deposits, the FSS noted.

The financial watchdog vowed to bolster its monitoring of foreign banks’ operations here to prepare for potential larger volatility in financial markets. 

By Jie Ye-eun (yeeun@heraldcorp.com)