26-Year Solo Ulsan City Treasury Rematch Between Gyeongnam and KB... The Variable Is

BNK Gyeongnam Bank, NH Nonghyup Bank, and KB Kookmin Bank are set to compete for the Ulsan city treasury deposit, which exceeds 5 trillion KRW annually. As commercial banks have recently been eyeing regional institutional businesses such as city and provincial treasuries, the focus is on whether Gyeongnam Bank will defend the city treasury it has held for 26 years or if Kookmin Bank will succeed in securing its first regional primary treasury deposit.

According to the financial sector on the 30th, the proposal submissions for the designation of Ulsan Metropolitan City treasury deposits held on the 24th and 25th showed that BNK Gyeongnam Bank and KB Kookmin Bank participated for the primary treasury deposit, while NH Nonghyup Bank and KB Kookmin Bank participated for the secondary treasury deposit. This sets the stage for Gyeongnam Bank and Kookmin Bank to face off again over the Ulsan city treasury deposit after four years.

A real estate project financing embezzlement incident involving approximately 56 billion KRW occurred at BNK Gyeongnam Bank. The photo shows a BNK Gyeongnam Bank branch in downtown Seoul on the 3rd. Photo by Jinhyung Kang aymsdream@

Gyeongnam Bank's strength lies in its clear regional base. According to the Financial Supervisory Service's Financial Statistics Information System, as of the first quarter, Gyeongnam Bank has 25 branches and 6 sub-branches in the Ulsan area, more than three times KB Kookmin Bank's 9 branches and 1 sub-branch. As a regional bank based in Gyeongnam, the relationships it has built with local residents, self-employed individuals, and small and medium-sized enterprises have been the foundation for maintaining the city treasury deposit for 26 years.

However, the demand from the local community for increased contributions poses a challenge. Compared to large commercial banks, Gyeongnam Bank has weaker fund mobilization capabilities, making it difficult to significantly increase contributions. Four years ago, during the last bidding, Gyeongnam Bank promised a contribution of 11 billion KRW.

In particular, the recent demands from Ulsan Mayor Kim Doo-gyeom and others for Gyeongnam Bank to change its bank name are also a concern. The intention is to further strengthen regional identity as the bank responsible for the Ulsan city treasury deposit. Gyeongnam Bank is reportedly considering various options for a name change. One proposal is to use the English initial 'U' from Ulsan to rename the bank as 'BUK Gyeongnam Bank,' but considering the approval process from authorities, amendments to the articles of incorporation, and the enormous associated costs, this is generally viewed as unrealistic.

A Gyeongnam Bank official stated, "Currently, we are exploring several options such as including Ulsan or symbols representing Ulsan on the bank's signage or specifying Ulsan on employee business cards in the Ulsan area," adding, "While the difference in asset size is a weakness, we plan to actively highlight our contributions to the regional economy."

Kookmin Bank's strength is its differentiated capital power compared to regional banks. This comes amid growing public opinion for expanded contributions to local communities, unlike four years ago. Recently, Kookmin Bank contributed 400 million KRW to the Ulsan Credit Guarantee Foundation and supported loans of about 6 billion KRW to small business owners in the region, thereby expanding its community contributions.

Although Kookmin Bank has never managed the Ulsan city treasury deposit, it operates treasury deposits in a total of 20 local governments, including secondary treasury deposits in four metropolitan autonomous entities?Busan, Gwangju, Gyeonggi, and Chungnam?and primary treasury deposits in five district-level local governments such as Nowon and Gwangjin districts in Seoul. A financial sector official said, "Just as Chosun University in Gwangju changed its main bank from Gwangju Bank to Shinhan Bank after about 50 years, voices calling for greater community contributions are rising in local communities," adding, "In this regard, Kookmin Bank is likely to take a more proactive approach."

Meanwhile, in the previous bidding for the Daegu city treasury deposit, Daegu Bank was the sole applicant for the primary treasury deposit and Nonghyup Bank for the secondary treasury deposit, both selected as preferred negotiation candidates. However, demands for increased contributions remain high in other regions. In Busan, where Busan Bank has maintained the primary treasury deposit for 22 years, voices calling for increased contributions have recently grown, especially among the city council and political circles, and some commercial banks are reportedly preparing to challenge for the deposit.

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