Expansion of Bank Management Disclosure... "Details on Performance and Retirement Benefits"

12th Banking Sector Management, Sales Practices, and System Improvement TF Working Group Meeting

The banking sector is introducing the 'Bank Management Status Disclosure Report (Status Report)' to expand the disclosure of management status. Through this, they plan to reveal detailed criteria for calculating executives' performance bonuses and employees' performance and retirement benefits.

On the 14th, the Financial Services Commission announced on the 15th that such measures were discussed during the 12th practical working group meeting of the Banking Sector Management, Business Practices, and System Improvement Task Force (TF) held at the Government Seoul Office in Jongno-gu, Seoul.

Kim So-young, Vice Chairman of the Financial Services Commission, is delivering opening remarks at the Financial Industry Globalization Task Force meeting held on the 13th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Yoon Dong-joo doso7@

The creation of the status report stems from the demand for materials that allow easier verification of management status beyond the existing investor-centered information provision, to induce social responsibility and sound management in the banking sector. Accordingly, the banking sector, led by the Korea Federation of Banks, has begun drafting the status report and plans to finalize detailed regulations by the third quarter of this year, preparing and disclosing the annual status report by the end of April of the following year.

The status report includes three items to easily explain what banks do, how they generate profits, and how the generated profits are utilized: ▲composition of assets and liabilities ▲composition of income and expenses ▲utilization of net income. The assets and liabilities section covers the composition of bank asset management and funding, including loans, securities, deposits, and borrowings, along with average interest rates.

In the income and expenses section, not only interest and fee income, which show bank profitability, but also employee salaries, a major expense item, are included. In particular, regarding salaries, plans are being developed to provide detailed explanations of the calculation criteria and major changes compared to the past for executives' performance bonuses, employees' performance bonuses, and voluntary retirement benefits, which have high internal and external interest. The net income section explains the scale and decision-making structure related to capital reserves and dividends to enhance management transparency. The banking sector plans to pilot disclose last year's report in the second half of this year to facilitate early establishment of this status report.

Vice Chairman Kim So-young said, "The status report started from the consideration of how to improve public and market understanding of bank management status," adding, "Through this report, bank management status will be disclosed more transparently, and bank executives will be more mindful of how the public and market view their decisions compared to before."

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