Bank Branches Decreased by 294, Mutual Finance Branches Increased by 52

NongHyup, Saemaeul Geumgo, ShinHyup, SuHyup Branches Total 9,436
Increase Despite Digital Finance Activation
Serving Low-Income Finance in Elderly-Dense Gun Areas

Last year, while nearly 300 bank branches closed, the number of branches operated by mutual finance institutions such as NongHyup, Saemaeul Geumgo, ShinHyup, and SuHyup increased by 52.

According to the financial sector on the 17th, the total number of branches of mutual finance institutions including NongHyup, Saemaeul Geumgo, ShinHyup, and SuHyup stood at 9,436 as of the end of last year. NongHyup had the most with 4,847 branches (including headquarters, branches, and simple offices), followed by Saemaeul Geumgo with 3,259, ShinHyup with 826, and SuHyup with 504. This represents an increase of 52 branches compared to the previous year (9,384). They have continued to steadily increase the number of offline branches this year as well. As of the end of last month, NongHyup had 4,851 branches, Saemaeul Geumgo 3,261, and SuHyup 507, showing slight growth.

This contrasts with commercial banks, which have been closing offline branches due to worsening profitability amid the full-scale digital finance era. The number of bank branches decreased by 294 from 6,094 in 2021 to 5,800 last year. As a result, with the inconvenience to financially vulnerable groups such as the elderly increasing, financial authorities have recently strengthened procedures for closing offline branches to curb this trend.

On the other hand, the reason mutual finance institutions maintain or increase their branches is that their main customers are elderly people. They are not familiar with non-face-to-face transactions through internet banking or applications (apps) and still prefer counter transactions. A mutual finance institution official said, “Since the elderly make up most of the members, they find it difficult to use digital finance and still seek safety through counter transactions, so we are not reducing counters.” Because cooperatives are based in financially underserved areas with many elderly residents, they continue face-to-face services to fulfill their role in serving ordinary citizens.

Despite the digital transformation trend, the increase in offline branches of mutual finance institutions is expected to continue. It is explained that they aim to fill the gap left by commercial banks while maintaining their identity as community-based financial institutions. An industry insider said, “Although there are limits to generating profits from loans and deposits in the region, since they provide financial services to members, they will maintain or increase branches.” Another official added, “From a profitability standpoint, it could even be negative, but we plan to maintain branches as much as possible by supplementing with other businesses.”

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