The Banks Best at Community Reinvestment Are Hana, iM, KEB Hana, and NongHyup

Busan, Gwangju, Jeonbuk, Gyeongnam, and JT Savings Also 'Top Excellence'

Hana Bank, iM Bank, Industrial Bank of Korea, and NH Nonghyup Bank were selected as the banks making the greatest efforts to promote regional economic growth. Among regional banks, Busan Bank, Gwangju Bank, Jeonbuk Bank, and Gyeongnam Bank were recognized, while JT Savings Bank was found to be actively reinvesting in the region among savings banks.

The Financial Services Commission announced on the 28th that it held the Regional Reinvestment Evaluation Committee and finalized this year’s evaluation results of financial institutions’ regional reinvestment. The financial authorities introduced the ‘Regional Reinvestment Evaluation System’ in October 2018 to encourage financial institutions that collect deposits in the region to support regional economic growth, and have conducted evaluations since 2020.

This system evaluates financial institutions based on their regional fund supply, support for small and medium-sized enterprises, support for loans to low-income households, the status of financial infrastructure, and efforts related to COVID-19 financial support, among other regional financial support strategies. The evaluation results are classified into five grades (Excellent, Good, Fair, Slightly Inadequate, Inadequate) and incentives are provided accordingly.

As a result of evaluations conducted on 15 domestic banks and 12 mutual savings banks, among commercial banks, Hana Bank, iM Bank, Industrial Bank of Korea, and Nonghyup Bank received the highest grade of Excellent. The number of evaluation regions where each bank achieved this grade is as follows: Industrial Bank of Korea (9 regions), Nonghyup Bank (7 regions), Hana Bank (5 regions), Shinhan Bank (4 regions), Kookmin Bank and Gyeongnam Bank (3 regions each), and iM Bank (2 regions).

Commercial banks that received the Good grade include Shinhan Bank, Woori Bank, and Kookmin Bank. Banks rated as Slightly Inadequate were SC First Bank and Suhyup Bank, while Citibank Korea was rated Inadequate. Among regional banks, Busan Bank, Gwangju Bank, Jeonbuk Bank, and Gyeongnam Bank received the Excellent grade, and regional banks demonstrated either Excellent or Good (Jeju Bank) grades in their headquarters’ locations and nearby areas due to strong fund supply performance and financial infrastructure.

Among mutual savings banks, JT Savings Bank received the Excellent grade, while Korea Investment Savings Bank, OK Savings Bank, and Aekyoon Savings Bank received the Good grade. JT Savings Bank achieved the Excellent grade in three regions, and Korea Investment, OK, and Aekyoon Savings Banks each achieved it in one region.

Meanwhile, the scale of bank loans in the evaluation regions (non-metropolitan areas) increased compared to 2022, but the loan-to-deposit ratio slightly declined. The loan growth rate last year was 3.4%, compared to 3.5% in 2022. The loan-to-deposit ratio was 123.7%, a slight decrease from 126.5% the previous year, but still higher than the metropolitan area’s 97.3%. By region, Jeju (184.3%), Daegu (158.1%), and Gwangju (150.4%) had high ratios, while Jeonbuk (70.6%), Gangwon (76.2%), and Jeonnam (95.7%) were below 100%.

The difference between the production share (47.5%) and loan share (34.8%) of the entire evaluation region was 12.7 percentage points, slightly wider than the previous year’s 12.2%. The production share refers to the proportion of the total regional gross domestic product accounted for by non-metropolitan areas.

As of last year, the proportion of loans to small and medium-sized enterprises among corporate loans in the bank evaluation regions was 95.1%, higher than the 81.6% recorded in the metropolitan area. The loan growth rate was 4.3%, slightly down from 5.7% the previous year, but the decline was smaller than that in the metropolitan area (from 9.0% to 5.9%). The proportion of loans to low-income households relative to household loans in the evaluation regions was 0.56%, up 0.16 percentage points from 0.4% the previous year. The financial authorities explained that this is a higher level compared to the metropolitan area (0.32%).

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