[By NBC-1TV H. J Yook]Citibank Korea Inc., (CKI, CEO YK Ha, www.citibank.co.kr) today reported net income of KRW 21.5 billion for the fourth quarter 2012 on revenues of KRW 367.0 billion. Net income 4Q12 was 31.8% lower year over year and 42.1% lower than the prior quarter while revenues were 12.5% lower than year over year and 12.1% lower than the prior quarter. Net income for the full year 2012 was 58.6% lower than that for the full year 2011 while revenues were 7.0% lower than the prior year period. CKI’s Basel II Capital Adequacy Ratio and Tier 1 Capital Ratio as of 2012 end were 17.71% and 14.68% respectively.

Interest revenue in 4Q12 was 10.3% down year over year to KRW 342.8 billion and interest revenue for the full year 2012 was also 3.9% down year over year to KRW 1,454.0 billion mainly due to worsening net interest margins by 20bps and 17bps respectively from spread compression driven by regulations, RAC tightening and a decrease in customer assets from asset optimization. Non-interest revenues 4Q12 were down 31.5% year over year to KRW 17.0 billion and non-interest revenues for the full year 2012 were down 47.6% year over year to KRW 77.1 billion mainly due to lower FX/derivatives gains and fee from investment products, offset by higher income from insurance-product sales and trust fees. Non-operating revenues for the full year 2012 were up 7.8 billion year over year mainly due to higher gains from AFS and loan sales, offset by lower one-time gains.

Expenses in 4Q12 were 5.7% up year over year to KRW 286.2 billion and expenses for the full year 2012 were also up 12.9% year over year to KRW 1,018.0 billion. The main drivers of increased expenses were higher charges related to pension scheme valuation and VERP cost executed in 4Q12, offset by the continued focus on re-engineering efforts.

Loan loss provisions & other allowances for the full year 2012 rose by 29.1% year over year to KRW 296.0 billion mainly due to increased litigation reserves and loan loss provisions, offset by decreased unused commitment reserve and release of tax audit reserve. The non-performing loan (NPL) ratio recorded 1.17% while NPL coverage improved to 203.3% up 15.4% compared to the end of last year.

Customer deposits as of 2012 end were down 5.1% year over year to KRW 32.4 trillion as a result of the continued deposit optimization. Customer loans decreased by 10.9% driven by RAC tightening & asset optimization.

“CKI’s 2012 results reflect a challenging economic, regulatory & credit environments, but we repositioned many areas such as branch optimization, HR restructuring & portfolio repositioning for future growth, and market share of major products was increased while revenues in CAW & offshore business expanded. In 2013, we will focus on retail mindset, innovation & re-engineering mindset, main bank relationship mindset & champion mindset we are the best” said YK Ha, CEO of CKI.