San-eun, Su-eun, Gi-eun, Net Profit Increased but Social Contribution Barely Changed

[Asia Economy Reporter Buaeri] It has been revealed that the ratio of social contribution expenditures to net income of policy banks has continuously decreased.

According to the 'Net Income and Social Contribution Expenditure' data submitted on the 26th by three policy banks to Park Jae-ho, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, KDB Industrial Bank's ratio of social contribution expenditure to net income decreased from 4.26% in 2019 to 3.16% in 2020, and 0.29% in 2021.

Looking only at social contribution expenditures, it steadily declined from 19 billion KRW in 2019 to 15.4 billion KRW in 2020, and 7.2 billion KRW in 2021. On the other hand, net income increased from 445.7 billion KRW in 2019 to 487.5 billion KRW in 2020, and 2.4618 trillion KRW in 2021. Although enormous profits were made, the amount returned to society was only a very small portion.

The situation was similar for IBK Industrial Bank. The ratio of social contribution expenditure to net income also decreased annually from 7.6% in 2019 to 6.73% in 2020, and 4.53% in 2021. In particular, last year's net income (2.0241 trillion KRW) increased by 45.3% compared to 2019 (1.3928 trillion KRW), but social contribution expenditure decreased by 14 billion KRW. IBK's social contribution expenditures were 105.7 billion KRW in 2019, 85 billion KRW in 2020, and 91.7 billion KRW in 2021.

The Export-Import Bank's ratio of social contribution expenditure to net income slightly rose from 4.04% in 2019 to 6.83% in 2020, then sharply dropped to 1.3% in 2021. During this period, social contribution activity expenditures decreased by about 42%, from 12.2 billion KRW in 2019 to 7 billion KRW in 2020. Net income during the same period was 301.6 billion KRW in 2019, 102.4 billion KRW in 2020, and 547.5 billion KRW in 2021.

The banking sector cited the COVID-19 pandemic as the cause. Due to social distancing guidelines, face-to-face donation activities were reduced. The provisional ratio of social contribution expenditures to net income for policy banks over the first six months of this year was 0.17% for Industrial Bank, 4.09% for IBK, and 0.4% for the Export-Import Bank, each lower by 0.12 percentage points, 0.44 percentage points, and 0.9 percentage points respectively compared to the previous year.

Assemblyman Park said, "No matter how severe the COVID-19 situation is, since enormous profits were made, it is desirable to increase contribution activities for local communities and ordinary citizens to give back to society," adding, "As policy banks, they should not just verbally promote ESG (Environmental, Social, and Governance) management but should consider their true responsibility for inclusive finance."

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