NongHyup, Kieop, and Jeonbuk Bank Recognized as 'Best' in Regional Reinvestment

Reflecting the Highest Number of Best Practices by Region
in Management Performance Evaluation

[Asia Economy Reporter Kim Hyo-jin] Among commercial banks, NH Nonghyup Bank and IBK Industrial Bank of Korea were evaluated by financial authorities as having performed the best in regional reinvestment, while among regional banks, Jeonbuk Bank received the highest marks.

On the 13th, the Financial Services Commission and the Financial Supervisory Service announced the results of the "2020 Financial Companies' Regional Reinvestment Evaluation." This evaluation assessed the regional reinvestment performance of financial companies during the past year, based on the "Regional Reinvestment Evaluation System Introduction Plan," which was established to encourage financial companies to support regional economic growth.

The evaluation targeted 13 local metropolitan cities and provinces excluding the Seoul Capital Area (Seoul, Gyeonggi, Incheon), and the financial companies evaluated were banks and large savings banks. KDB Industrial Bank, Export-Import Bank of Korea, foreign bank branches, and internet banks were excluded.

The evaluation was conducted using quantitative indicators such as local fund supply, loans to small and medium-sized enterprises (SMEs) and low-income households, and infrastructure investment performance, as well as qualitative indicators related to regional financial support strategies.

By region, NH Nonghyup Bank achieved the highest grade in 8 areas, the most among banks, followed by IBK Industrial Bank of Korea with 5 areas. Shinhan Bank and KB Kookmin Bank each received the highest grade in 3 areas, and Hana Bank in 2 areas.

Among regional banks, Jeonbuk Bank received the highest overall grade. Korea Investment Savings Bank received the highest grade among savings banks.

As of the end of last year, loans in the evaluation regions accounted for 36.1% of the total loans by banks. This was 12.1 percentage points lower than the production share of the evaluation regions (48.2%) during the same period. The gap narrowed by 1.4 percentage points compared to 2018.

Relatively, more banks received the highest grade in metropolitan cities, and overall, Jeju region had the most.

At the end of last year, loans to SMEs in the evaluation regions accounted for 95.4% of corporate loans, up 0.4 percentage points from 95.0% in 2018. The growth rate of SME loans increased by 1.2 percentage points year-on-year to 6.3%.

The amount of low-income household loans (Saehimang Holssi) in the evaluation regions was 1.58 trillion won, accounting for 42.3% of the total low-income household loans of 3.73 trillion won.

Financial authorities plan to announce the regional reinvestment status and final evaluation grades by financial company within this month and reflect them in management performance evaluations. They are also considering applying these results to the selection of local government deposit banks.

This content was produced with the assistance of AI translation services.