Savings Bank Employees Earned 500 Million Won Each Last Year... 2.5 Times More Than Commercial Banks

Top 5 Savings Banks Achieve 515.8 Million KRW Productivity Per Employee
2.5 Times That of Commercial Banks, 1.8 Times Compared to KakaoBank
Related Metrics Steadily Improve Despite Workforce Growth
"Effect of High-Interest Income" Also Noted

The photo is unrelated to specific expressions in the article. [Image source=Getty Images Bank]

[Asia Economy Reporter Song Seung-seop] It has been identified that employees of major savings banks earned over 500 million KRW per person last year. In terms of productivity per person alone, this level far surpasses that of commercial banks and internet-only banks. This is explained by the balloon effect caused by loan regulations and the significant benefits reaped from digital innovation, along with an analysis that interest income generation was smooth due to high-interest rate operations.

According to the savings bank industry on the 4th, the per capita productivity (pre-provision operating profit) of the five major savings banks?SBI, OK, Welcome, Pepper, and Korea Investment Savings Bank?recorded an average of 515.8 million KRW in the third quarter of last year. Per capita productivity improved by 114.34 billion KRW (38.5%) compared to 372.4 million KRW a year earlier. It is estimated that it will virtually surpass the per capita productivity indicator at the end of the previous year (530.2 million KRW).

Pre-provision operating profit is the profit after deducting various expenses from total revenue. It is a representative indicator showing a bank's revenue-generating ability and does not reflect the provisions accumulated by financial companies.

By company, SBI Savings Bank, ranked first in asset size, had a per capita productivity reaching 1 billion KRW. OK Savings Bank followed with 570 million KRW, and then Welcome (300 million KRW), Pepper (323 million KRW), and Korea Investment Savings Bank (386 million KRW).

Higher Productivity than Commercial Banks and KakaoBank... "Effect of High-Interest Income" Also Noted

The per capita productivity of major savings banks is higher than that of the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup?and KakaoBank during the same period. The average profit per person at commercial banks was 187 million KRW, making the gap more than 2.5 times. Compared to KakaoBank, which recorded 280 million KRW, the difference is about 1.8 times.

The productivity indicator of savings banks improved even as they steadily increased their workforce, unlike large financial companies that are rapidly reducing personnel. Per capita productivity generally tends to decrease as the number of employees increases. The workforce of savings banks has increased every year over the past five years, reaching a record high of 9,791 since their inception. This contrasts with commercial banks, where hundreds of employees leave through voluntary retirement programs and new recruitment has decreased.

[Image source=Yonhap News]

Accordingly, the savings bank sector is evaluated to have fully enjoyed the balloon effect based on a relatively relaxed total household loan volume. As commercial banks repeatedly reduced limits and suspended loans, the number of high- and medium-credit customers needing balance payments also increased accordingly. There is also an interpretation that the relatively weak mobile sector improved due to a large expansion of digital and IT personnel and app remodeling.

There was also an opinion that the characteristics of the financial sector, where higher interest rates generate better interest income, should be considered. Professor Kim Sang-bong of Hansung University’s Department of Economics pointed out, "The financial industry earns profits through interest rates and interest," adding, "It is not that one employee produced outstanding innovative results, but rather the effect of earning money from customers with relatively high returns."

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