Comparative analysis of Korean banks' performance

The purpose of this paper is to analyze Korean banks’ performance which isreflected on their financial statements and to provide some comments to improve their banking business. This study is carried out by comparing the eight Korean banks’ past five years performance results with other banks in the State ofCalifornia. Other banks include Asian banks other than Korean banks owned by such Asians (e.g., Chinese and Japanese) and American banks owned by other ethnic groups of Americans (e.g., “white” American). Comparative financial analysis indicates that Korean banks are relatively conservative in managing operations and lending and are more actively involved in their services for international business and sales activities in SBA loans. The analysis also indicates that Korean banks’ loan quality is relatively low and their loan market appears to have been saturated. We recommend on the basis of the analysis that Korean banks adopt a more active marketing strategy to expand and create their own market, consider tighter control for their operations with understanding banking regulations (e.g., Financial Institutions Reform, Recovery, and Enforcement Act) and adopt the loan policy in a way that they can make a loan decision with more reliable cash flow analysis.