KB Kookmin Bank and Citibank Korea's first joint branch in Daejeon (KB Kookmin Bank)

KB Kookmin Bank, South Korea's leading commercial bank, and Citibank Korea inaugurated a joint branch in Daejeon on Monday, according to the Korean lender.

Typically, when a bank's branch faces challenges in sustaining its operations while demand still exists in the area, the option of establishing a joint branch is contemplated, an official from KB Kookmin Bank explained.

The joint branch will consist of a KB Kookmin Bank branch on the second floor of Citibank's current Daejeon Jungang branch.

"Based on our business partnership with Citibank Korea, we will provide differentiated financial services while maintaining customer convenience,” an KB Kookmin Bank official said.

In June, both banks joined forces to alleviate the challenges encountered by consumers amid Citibank's gradual retail banking shutdown process that began in 2021.

As part of this agreement, KB Kookmin Bank pledged to extend its financial services to Citibank Korea's retail customers, starting July 3. These services include foreign exchange and safety deposit boxes.

Also, if customers of Citibank Korea become new clients of KB Kookmin Bank, they can access benefits as existing clients, irrespective of their past transaction history with KB Kookmin Bank.

A Citibank Korea official added, "Since the business agreement in June, Citibank Korea has been steadily expanding the partnership by providing space for KB Kookmin Bank consultations within our branches, and now we operate joint branches.”

When questioned about the selection of Daejeon as the inaugural joint branch location with Citibank, a spokesperson from KB Kookmin Bank said, "Various factors have been considered, including the presence of similar branches nearby and the existence of demand that should be covered."

He added that there have been no concrete decisions made regarding the location of a second joint branch with Citibank.

This also represents the fourth joint branch for KB Kookmin Bank.

In May of last year, it opened joint branches with Shinhan Bank in Yangju, Gyeonggi Province, and Yeongju, North Gyeongsang Province.

In the same year, KB Kookmin Bank also opened a joint branch with BNK Busan Bank in Geumgok-dong, Busan.

Meanwhile, in the first half of this year, Citibank Korea experienced a substantial surge in its net profit, while its foreign banking competitor in Korea, SC Bank Korea -- which operates both retail and corporate banking -- faced a decline. This shift can be primarily attributed to cost dynamics.

SC Bank Korea's net profit for the first half of the year totaled 209.2 billion won ($156.3 million), reflecting a 1.4 percent decrease compared to the 212.1 billion won reported during the same period the previous year.

In contrast, Citibank Korea's net profit exhibited remarkable growth, surging from 78.7 billion won in the first half of the preceding year to 177.7 billion won in the first half of this year -- an increase of 99 billion won, equivalent to 125.7 percent growth.

In the first half, SC Bank Korea witnessed a notable uptick in costs, with expenditures climbing from 332.4 billion won last year to 406.3 billion won -- a substantial surge amounting to 739 billion won.

Citibank Korea effectively curtailed its expenses, reducing them from 315.8 billion won to 300 billion won.