Shinhan Bank Sweeps Seoul City's 48 Trillion Won 1st and 2nd Treasury Accounts

"Significant Advantages in Multiple Areas Including Interest Rates"

[Asia Economy Reporter Yoo Je-hoon] Shinhan Bank has been selected as the custodian managing Seoul's finances, which amount to 48 trillion won annually. After retaining the management of the 1st treasury, which it has operated for the past four years, it has now secured the 2nd treasury as well.

According to the financial sector on the 15th, Seoul held a treasury designation review committee meeting the previous day and selected Shinhan Bank as the operator for both the 1st and 2nd treasuries. The 1st treasury manages a general and special account budget of approximately 44.2 trillion won, while the 2nd treasury is responsible for managing funds worth about 3.5 trillion won.

Accordingly, Woori Bank, which had operated the city treasury for over 100 years, lost the 1st treasury in 2018 and this year also faced defeat in the 2nd treasury. KB Kookmin Bank, which challenged the bid based on its substantial financial power, will have to wait another four years.

The treasury designation review committee evaluated the bids based on the following criteria: ▲ internal and external creditworthiness and financial stability of the financial institution (25 points) ▲ loans to the city and deposit interest rates (20 points) ▲ convenience for citizens (18 points) ▲ treasury management capability (28 points) ▲ contributions to the local community and cooperative projects with the city (7 points) ▲ other factors (2 points).

Industry insiders believe that the outcome was decided mainly by loan and deposit interest rates and contributions. A representative from a commercial bank said, "Shinhan Bank showed a significant advantage in various evaluation categories such as interest rates and contributions," adding, "Considering the enormous costs incurred over four years to build the IT system, it seems they bet on not relinquishing it to other banks again." Another insider commented, "For the city, changing the IT system after four years would have been a burden."

Meanwhile, with this acquisition of the city's 1st and 2nd treasuries, Shinhan Bank has gained both tangible and intangible benefits, including liquidity and credibility as the city treasury bank. The industry expects that this bidding result could also influence the upcoming competition for the 25 district treasuries. Currently, Woori Bank operates 18 district treasuries, while Shinhan Bank and KB Kookmin Bank manage 5 and 2 respectively.

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