Large Savings Banks See Total Annual Salaries Surge by '8.3 Billion+ KRW' in One Year

Total Industry Average Annual Salary Reaches 47 Billion Won... Up 21%
Average Salary Per Person Also Surpasses 60 Million Won
Record-Breaking Performance Boosts Bonuses

[Asia Economy Reporter Song Seung-seop] Last year, large savings banks significantly increased the salaries of their executives and employees. It is analyzed that this was influenced by the expansion of performance bonuses due to improved business results and the surge in loan demand from financially vulnerable groups toward savings banks amid the COVID-19 pandemic.

According to the savings bank industry on the 30th, the total annual salary of large savings banks last year averaged 46.958 billion KRW. Compared to the previous year’s 38.558 billion KRW, this represents an increase of 8.3995 billion KRW (21.78%) on average.

The largest increase was seen at Pepper Savings Bank, where the number of employees increased by 66, and the total compensation rose by 7.4 billion KRW (29.01%) to reach 32.9 billion KRW. Welcome Savings Bank increased by about 7 billion KRW (20%) to 42 billion KRW, and SBI Savings Bank recorded 48.83 billion KRW (13.42%). OK Savings Bank had the highest total salary at 64.1 billion KRW, but the total number of employees decreased by 132, resulting in about a 3% decline. Korea Investment Savings Bank plans to hold a compensation committee meeting in April and disclose the results thereafter.

The average annual salary per employee also rose by 7.65 million KRW (12.83%) from about 59.6 million KRW last year to 67.25 million KRW, surpassing the 60 million KRW mark. The highest average salary was at SBI Savings Bank, which increased by about 4 million KRW per person to 82 million KRW. Pepper Savings Bank and Welcome Savings Bank recorded 80 million KRW and 56 million KRW respectively, each rising by 6 million KRW, showing the largest increase. OK Savings Bank saw a 3 million KRW increase to 51 million KRW.

Net Profit Surpasses 1 Trillion KRW in Three Quarters... Improved Earnings Lead to Salary Increases

The savings bank industry has been steadily improving profitability, leading to increased salaries and performance bonuses for employees, reflecting better treatment. Since surpassing 1 trillion KRW in net profit in 2017, net profits have increased by around 100 billion KRW annually. Last year, for the first time, net profit exceeded 1 trillion KRW within three quarters, marking the highest performance in industry history. Korea Investment Savings Bank, which has not disclosed specific compensation levels, may further increase the total and average salaries of the top five banks if wage increases are implemented due to improved performance.

The savings and loans of savings banks increased by about 13 trillion KRW each to 77.4574 trillion KRW and 79.1764 trillion KRW respectively, reaching the highest levels since statistics began. This is attributed to image improvements through various promotions and the spread of non-face-to-face and digital finance, making it easier to use savings banks without offline branches, as well as an increase in customers seeking savings banks with relatively higher deposit interest rates amid a low-interest-rate environment.

There is also analysis that financially vulnerable groups flocked to secondary financial institutions during the COVID-19 situation, resulting in windfall profits through high-interest loans. According to the Financial Supervisory Service, among the 20.2 trillion KRW in household credit loans from savings banks at the end of last year, 5.5 trillion KRW, or 27.2%, were high-interest loans with interest rates exceeding 20%.

An industry insider explained, "It is true that low-credit borrowers with low credit ratings flocked last year," but added, "the average interest rate on newly handled household loans has steadily declined."

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