Shinhan Bank Retains Seoul Treasury Amid Rivals' Strategic Shifts, Secures Both Primary and Secondary Accounts

Shinhan Bank Achieves Top Score in Bidding
Retains Position Even in Secondary Treasury, Where All Four Major Banks Competed
Eight Years of Stable Treasury Management... Little Differentiation in Interest Rates or Contributions

This year’s bidding for the position of Seoul Metropolitan Government’s treasury manager, regarded as the pinnacle of institutional banking business, concluded with Shinhan Bank retaining its existing status. Despite a strong bid by Woori Bank to reclaim its former position, KB Kookmin Bank’s strategic shift due to concerns over profitability, and Hana Bank’s fierce competition, Shinhan Bank defended both the primary (No.1) and secondary (No.2) treasury accounts. There is speculation that there was little differentiation between banks in terms of interest rates and contributions; however, the decisive factor appears to have been Shinhan Bank’s stable management of the treasury over the past eight years.

According to the financial sector on May 13, Shinhan Bank was selected as the preferred candidate for both treasury accounts based on the results of the “Treasury Designation Review Committee” held by the Seoul Metropolitan Government the previous day to select the next city treasury manager. Shinhan Bank scored a total of 973.904 points for the primary account and 925.760 points for the secondary account. Considering that the results were announced less than two hours after the presentation (PT) session ended around 3 p.m. that day, observers believe there was little disagreement among committee members.

Shinhan Bank’s retention of its role as Seoul’s treasury manager is highly symbolic. In 2018, it broke Woori Bank’s monopoly that had lasted for 103 years by winning the primary account. Now, by being entrusted with Seoul’s treasury for three consecutive terms—totaling 12 years—Shinhan Bank has earned recognition for its operational stability. The Seoul city treasury is not only the largest among all local government treasuries nationwide, but also carries symbolic weight as it manages the finances of the capital, making it a key achievement in institutional banking.

This year’s bidding process was shaped by each bank’s strategic moves in an environment where profitability was difficult to expect. Notably, KB Kookmin Bank, which had previously competed for both accounts, focused all its efforts on the secondary account this time. Despite its ample capital, KB Kookmin Bank adopted a pragmatic strategy, considering its lack of experience operating the primary account and the potential additional costs of transferring data. The secondary account, which manages funds, allows banks to gain treasury management experience while utilizing the primary account’s IT system, resulting in relatively lower management costs.

Adding to the unpredictability, Hana Bank, which did not participate in the 2022 bidding, joined the competition for the secondary account this time. An official from a commercial bank said, “There were rumors that KB Kookmin Bank had offered a considerable contribution and that Hana Bank’s last-minute push was fierce, so the secondary account remained uncertain until the very end.” Woori Bank, too, allocated a larger budget than four years ago in its determined bid to reclaim both accounts, but ultimately fell short again.

In the end, analysts agree that Shinhan Bank’s stable treasury management over the past eight years was the key factor in securing even the secondary account, where all four major domestic banks competed. There is also the view that there was no compelling incentive to replace the current treasury manager, given the lack of a decisive edge in differentiating factors such as interest rates or contributions. A banking industry official commented, “As the size of the Seoul city budget grows, the IT management system has been becoming more vast and complex. Deciding to overhaul the entire system now poses much greater risks and burdens than in the past, which likely influenced the outcome.”

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