Standard Chartered Bank Korea (SC Bank Korea) is embroiled in a controversy over "eat and run" as its net profit is decreasing, but the bank is increasing the consulting fees and royalty payments it pays to its headquarters.
According to the Financial Supervisory Service (FSS), the bank's net profit in the first quarter of this year came to 74.3 billion won, off 18 percent from 88 billion won in the same quarter of last year.
Its net profit also decreased by 19.12 percent to 221.3 billion won last year from 273.6 billion won in 2017.
Despite its performance, the bank has decided to pay an interim dividend worth 500 billion won this year. Last year, it also paid 112 billion won in settlement dividends.
In addition, advisory fees and royalties paid to Standard Chartered Group, which is at the top of the bank's governance structure, are also on the rise. The bank's service cost amounted to 41.38 billion won in the first quarter, up 14 percent from 35.48 billion won during the same period last year.
The service cost also rose 38.48 percent from a year earlier to 165.9 billion won last year. Consultation fees and royalties account for a large portion of the service cost.
Despite the poor performance, critics say that deciding to pay high dividends and paying consulting fees and royalties seems to be a preparatory step for the bank's withdrawal from the country.
Rep. Kim Byung-wook of the ruling Democratic Party of Korea said in March, "It was controversial because SC Bank Korea, which is 100 percent owned by foreigners, paid dividends in the deficit status," adding, "I think it is inviting suspicion that it is a preliminary step to leave Korea."
