Large Savings Banks, Record-Breaking Performance Expected... Total Annual Salaries Surge by '8.3 Billion KRW + α' (Comprehensive)

Total Industry Average Annual Salary Reaches 47 Billion KRW, Up 21%
Average Salary Per Person Also Surpasses 60 Million KRW
Record-Breaking Performance Drives Increased 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 flocking to 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 is 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 saw a decrease of about 3% as the total number of employees dropped by 132. 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 surpassed the 60 million KRW mark, rising by 7.65 million KRW (12.83%) from about 59.6 million KRW last year to 67.25 million KRW. 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 increases. OK Savings Bank saw a 3 million KRW increase to 51 million KRW.

Net Profit Surpasses 1 Trillion KRW in Three Quarters... Performance Bonuses Also Significantly Increased

The savings bank industry has been steadily improving profitability, leading to rising salaries and better treatment for employees. 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 just three quarters, marking the industry's highest-ever performance.

Along with salary increases, performance bonuses have also significantly risen. SBI Savings Bank, the industry leader in assets, paid a total of 12.29 billion KRW in performance bonuses to its employees. This is a 13% (1.43 billion KRW) increase compared to the previous year’s 10.86 billion KRW. Korea Investment Savings Bank, which has not disclosed specific compensation levels, could further increase the total and average salaries of the 'Top 5' if it distributes performance bonuses due to improved results.

Industry insiders preparing for related management disclosures do not deny the wage increases due to strong performance. A savings bank official said, "We will know once the management disclosure is released, but I understand that records were broken," adding, "Since we exceeded targets, salaries and performance bonuses were higher." Another industry official also stated, "Performance improved, and although modest, salary and performance bonus increases were implemented."

Savings banks’ deposits and loans increased by about 13 trillion KRW each, reaching 774.574 trillion KRW and 791.764 trillion KRW respectively, the highest levels since statistics began. This is attributed to image improvements through various promotions, the spread of non-face-to-face and digital finance making it easier to use savings banks without offline branches, and an increase in customers seeking savings banks with relatively higher interest rates on deposits and savings 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 rates exceeding 20%.

Another industry official explained, "It is true that low-credit borrowers with poor 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.