Savings Banks 'Big 5' Fierce Battle for Position... Industry Leader SBI's Dominance Continues

SBI Savings Bank Surpasses 11 Trillion Won in Assets for the First Time in the Industry
'Economies of Scale' Lead to No.1 Net Income and Deposits
Competition for 3rd Place Expected to Intensify

[Asia Economy Reporter Song Seung-seop] In the savings bank industry, which posted record-breaking performance, SBI Savings Bank, ranked first in asset size, appears to be establishing a dominant position. It is interpreted that the gap with other companies has rapidly widened by realizing economies of scale. Meanwhile, the gap among the 3rd to 5th places has further narrowed, and competition for the top ranks is expected to intensify.

According to the industry on the 2nd, SBI Savings Bank's assets last year amounted to 11.2552 trillion KRW, an increase of 2.5676 trillion KRW (29.55%) from 8.6876 trillion KRW the previous year. This is the first time SBI Savings Bank has surpassed 11 trillion KRW in assets. During the same period, net income also increased by 37.24% to 258.3 billion KRW, and deposits rose by 23.16% to 8.7857 trillion KRW.

With record-high performance, it also cleared a deficit of about 700 billion KRW that had not been liquidated for eight years. The holding company, SBI Holdings, incurred a massive deficit due to contingent liabilities during the acquisition of Hyundai Swiss Savings Bank in 2013. Through an aggressive management strategy, it reduced the deficit to 15 billion KRW by the third quarter of last year and fully cleared it in the books last year. The deficit item on the financial statements was converted to retained earnings, recording 49.2 billion KRW.

SBI Savings Bank is solidifying its dominant position by widening the gap even within the Big 5 (SBI, OK, Korea Investment, Pepper, Welcome). With assets of 9.0162 trillion KRW, it leads the industry’s second-ranked OK Savings Bank by 2.239 trillion KRW. Considering the gap was 1.3958 trillion KRW a year ago, it has nearly doubled.

SBI Significantly Expands Mid-Interest Loans... Fierce Battle for 3rd Place

It is analyzed that the strategy of significantly increasing mid-interest loans was effective. At the end of last year, SBI Savings Bank’s household credit loan balance was 4.5332 trillion KRW. According to insiders, more than 60-70% of this is mid-interest loans (16%), indicating a substantial expansion of related product lines. As a result, interest income increased by 1.952 trillion KRW (24.74%) to 984 billion KRW compared to the previous year. Although the profit margin is lower than the existing high-interest products exceeding 20%, it attracted many borrowers, realizing economies of scale.

A significant portion of customers come from the proprietary mobile application launched in June 2019. An SBI Savings Bank official explained, "There are 700,000 sign-ups through the mobile platform, with deposits amounting to about 2.2 trillion KRW. Since last year, the influx of younger customers, who are difficult to consider as existing customers, has also increased."

The third place was taken by Korea Investment Savings Bank, which recorded assets of 4.5666 trillion KRW, growing 33.55% (1.1449 trillion KRW) compared to the previous year. Korea Savings Bank, which was pushed down to fourth place for the first time since 2016 due to Pepper Savings Bank entering third place in the second quarter, reclaimed its position by surpassing 4 trillion KRW in assets in the first quarter and maintained it.

Competition for the third place in the industry is expected to become even fiercer. The rapid growth of fourth-ranked Pepper Savings Bank and fifth-ranked Welcome Savings Bank is narrowing the gap.

Pepper Savings Bank’s assets last year were 4.3198 trillion KRW, and Welcome Savings Bank’s were 4.2798 trillion KRW. The gap between 3rd and 4th place is 236.8 billion KRW, and between 4th and 5th place is only 40 billion KRW. In particular, Pepper Savings Bank’s net income increased by 161.65% compared to the previous year, far exceeding the industry average of 9.97%, and its assets grew by 30.23%. Welcome Savings Bank had the highest growth rates among the top five banks, with assets and deposits increasing by 39.43% and 29.46%, respectively.

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