Record-breaking performance raises year-end bonus expectations... Savings banks' average annual salary significantly increased (Comprehensive)

Savings Banks, Total Cumulative Salaries in H1 Reach 330.5 Billion KRW
10.2% Increase in One Year... Record High Level
Major Firms Like SBI and OK Savings Bank Lead Salary Raises
Year-End Bonus Expectations Rise Alongside Performance

[Asia Economy Reporter Song Seung-seop] Salaries in the major savings bank industry are expected to reach record highs this year. This is largely due to the high likelihood of substantial bonus payments and salary increases based on loan performance. Large savings banks have already caught up to commercial banks in terms of wage levels and are aggressively recruiting digital and IT talent, so total salary amounts are expected to rise sharply.

According to the industry on the 15th, the cumulative total salary for the first half of the year among 79 savings banks was 330.5 billion KRW, the largest ever for the second quarter. This is an increase of 30.8 billion KRW (10.2%) compared to the same period last year, which was around 299.7 billion KRW. Compared to five years ago, this amount is comparable to the cumulative total salary for the first three quarters (336.8 billion KRW).

Considering the industry workforce (9,726 employees), the average annual salary per savings bank employee this year is estimated to be about 67.96 million KRW. This is an increase of 3.63 million KRW (5.6%) from 64.33 million KRW at the end of last year. However, this figure excludes year-end bonuses and performance pay, so the actual increase rate is expected to be higher.

The rapid salary increases were led by large savings banks at the forefront of the industry. According to electronic disclosures by the Financial Supervisory Service, the total paid salaries of the top four savings banks by asset size?SBI, OK, Welcome, and Pepper Savings Banks?amounted to 46.958 billion KRW last year. This is a sharp rise of 8.3995 billion KRW (21.5%) from 38.648 billion KRW just one year earlier.

The savings bank with the highest total salary payments was OK Savings Bank. As of the first half of the year, it spent 32.099 billion KRW on salaries, an increase of 11.07 billion KRW (52.6%) compared to 21.029 billion KRW in the first half of last year.

SBI Savings Bank’s salary payments for the second quarter totaled 27.054 billion KRW, and considering the number of employees, the average annual salary is expected to reach 90.02 million KRW. Adding performance bonuses, the annual salary is expected to exceed 100 million KRW. At the end of last year, SBI Savings Bank already recorded the highest average wage in the industry at 82 million KRW per person. The average performance bonus paid was also the highest at 20 million KRW per person.

Welcome Savings Bank and Pepper Savings Bank also ranked high, spending 24.221 billion KRW and 20.94 billion KRW respectively. Although their average annual salaries last year were 56 million KRW and 80 million KRW, which were lower than other large banks, their average salaries increased by nearly 6 million KRW. Considering that some commercial banks only raised salaries by 5 million KRW during this period, this represents a steep increase.

Sharp Salary Increase... Driven by the ‘Dual Engines’ of Mid-Interest Loans and Digital

The steep salary increases are thanks to high performance driven by mid-interest loans and loan growth from balloon effects, despite policy risks such as the household debt total volume regulation implemented this year. Major commercial banks are subject to strict total loan volume regulations, making it easier for savings banks, which have relatively more flexible total volume limits, to operate. In particular, the total volume limit for mid-interest loans is in the 16% range, higher than the overall limit of 21.1%.

SBI Savings Bank recorded operating revenue of 672.2 billion KRW in the first half, a 23.3% increase compared to the same period last year. Net income also rose 44.9% to 193.6 billion KRW. OK Savings Bank saw operating revenue (576 billion KRW) and net income (148.3 billion KRW) increase by 19.3% and 53.8%, respectively. Welcome Savings Bank achieved a record net income of 70.6 billion KRW, and Pepper Savings Bank also posted a net income of 37.2 billion KRW, showing rapid growth in performance.

The strategy to strengthen digital and mobile services and attract customers in their 20s and 30s was also effective. SBI Savings Bank’s mobile banking application ‘Cider Bank,’ launched in 2019, succeeded in securing 1.4 million downloads and 800,000 customers within two years.

Industry salary levels are expected to continue rising. As demand for non-face-to-face financial services rapidly increases, savings banks are recruiting digital and IT talent even at premium salaries. Major savings banks have hired a large number of employees in financial IT development, information security, and MyData sectors through ongoing and experienced hires this year.

Within the industry, expectations for performance bonuses are also growing due to strong results. A savings bank official said, "Although about three months of business days remain, performance is expected to improve," adding, "While the scale and timing are unknown, there is a possibility of performance bonuses."

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