Regional Reinvestment 'Top Excellence' Awarded to Kookmin, KEB Hana, and NongHyup Banks Among Commercial Banks

Regional Banks Excel: Busan, Gyeongnam, and Gwangju Banks Awarded Best Honors

Among commercial banks, KB Kookmin Bank, IBK Industrial Bank of Korea, and NH Nonghyup Bank received the highest ratings in the regional reinvestment evaluation results in the financial sector. KB Kookmin Bank is the first commercial bank, excluding specialized banks, to receive the highest rating.

On the 9th, officials were busy moving in the corridor of the Financial Services Commission at the Government Seoul Office in Jongno-gu, Seoul, where the financial authorities decided to include mortgage loans (Judaemae) in the 'debt refinancing' infrastructure scheduled to be launched in May by the end of the year. The financial authorities explained that they aim to reduce the interest burden on mortgage loans by establishing a debt refinancing platform that allows users to compare financial sector loan interest rates at a glance and switch loans easily. Photo by Dongju Yoon doso7@

On the afternoon of the 30th, the Financial Services Commission held the 'Regional Reinvestment Evaluation Committee' at the Government Seoul Office in Jongno-gu, Seoul, and announced on the 31st that it had conducted a regional reinvestment evaluation based on the performance of 15 banks and 12 savings banks last year. Among regional banks, Busan Bank, Gyeongnam Bank, and Gwangju Bank, and among savings banks, Korea Investment Savings Bank received the highest ratings.

The regional reinvestment evaluation system, implemented since 2020, was established to encourage financial institutions that collect deposits and savings in the region to support regional economic growth. It evaluates local capital supply, support for small and medium-sized enterprises, support for loans to low-income households, and the status of financial infrastructure, and operates by classifying the results into five grades and providing incentives accordingly.

According to the evaluation results, Nonghyup Bank had the highest number of regions with the highest rating among commercial banks, with 10 regions, followed by IBK Industrial Bank of Korea (6 regions), KB Kookmin Bank (6 regions), Hana Bank (3 regions), and Shinhan Bank (1 region). Regional banks received either the highest or excellent ratings in their headquarters locations and nearby areas. Among savings banks, Korea Investment Savings Bank received the highest rating in 2 regions, while Daishin Savings Bank and JT Chin-ae Savings Bank each received excellent ratings in 1 region.

These results are expected to influence the competition for securing financial deposits from local governments and education offices, including Ulsan Metropolitan City, where some banks have recently been fiercely competing. The Financial Services Commission stated, "The regional reinvestment evaluation results are used in the Financial Supervisory Service's management status evaluation and the selection criteria for local government and local education office financial deposits," adding, "We will continue consultations with related institutions to increase utilization and continuously review system improvements to enhance evaluation validity in line with changes in the financial environment."

Meanwhile, in this evaluation, the overall loan growth rate of banks in the evaluation regions (non-metropolitan areas) decreased compared to the previous year (6.7% → 3.5%) but was better than that of the metropolitan area (8.8% → 4.8%). The loan-to-deposit ratio also slightly decreased compared to the previous year (131.3% → 126.5%) but was still higher than that of the metropolitan area (92.7%).

The proportion of small and medium-sized enterprises in corporate loans in the evaluation regions was 95.7%, higher than the metropolitan area (83.9%), and the proportion of loans to low-income households in household loans was 0.40%, slightly down by 0.1 percentage points from the previous year but still higher than the metropolitan area (0.22%).

The number of branches per million people was 102.9, lower than the metropolitan area (119.5), but the decrease from the previous year was 3.7 branches, which was a more gradual decline compared to the metropolitan area (7 branches decrease).

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