[Exclusive] Seoul City Treasury Bidding Closes at 51 Trillion Won... Shinhan vs. Woori Head-to-Head for Primary Treasury

Shinhan Bank and Woori Bank are set to compete for the treasury manager position responsible for managing Seoul City's annual budget of 51 trillion won. KB Kookmin Bank and Hana Bank will participate only in the bid for the secondary treasury account.

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According to the financial sector on May 6, four banks-Shinhan, Woori, KB Kookmin, and Hana-submitted proposals for the Seoul City treasury bid, which closed at 6 p.m. that day.

Currently, Shinhan Bank manages both the primary and secondary treasury accounts, while Woori Bank is aiming to reclaim its previous position; both have submitted proposals for both accounts. KB Kookmin Bank, which had participated in both primary and secondary treasury bids since the introduction of the dual treasury system in 2018, submitted a proposal only for the secondary account this time. Hana Bank also applied only for the secondary treasury account. Previously, NH NongHyup Bank and Standard Chartered Bank Korea attended the briefing session but did not participate in the bidding.

The primary treasury account handles Seoul City's general and special accounting budgets, while the secondary account is in charge of managing funds. Of this year's 51.4778 trillion won budget, approximately 47 trillion won is allocated to the primary treasury. In effect, the bank selected for the primary treasury account will hold the title of managing Seoul City's treasury.

Shinhan Bank and Woori Bank, who are facing off for the primary treasury account, also competed for the operating rights in both 2018 and 2022. Seoul City's treasury was managed exclusively by Woori Bank from the days of Gyeongseongbu Treasury in 1915, but Shinhan Bank broke the 103-year monopoly by acquiring the operating rights in 2018. In 2022, Shinhan Bank maintained its position as the primary treasury manager and has continued in this role for eight years.

The secondary treasury account will see a four-way competition as KB Kookmin Bank and Hana Bank join the race. While Woori Bank had long managed the secondary treasury, Shinhan Bank took over the role in 2022.

Both Shinhan Bank and Woori Bank are strongly committed to defending or reclaiming the primary and secondary treasury accounts, suggesting a fierce contest. However, as KB Kookmin Bank, which was once a strong contender for the primary treasury, has decided to focus solely on the secondary treasury, industry attention is now also focused on the outcome of the secondary treasury selection. KB Kookmin Bank achieved record-high results last year and has relatively strong financial resources, but its lack of experience in managing the primary treasury has been seen as a weakness.

The bank that secures the treasury operating rights will be responsible for managing general revenue and expenditure or funds. Additional business opportunities, such as ancillary projects and public servant payroll management, are also expected. Beyond expanding deposits, the symbolic significance and credibility gained from managing the treasury of the country's largest local government are considerable. However, since competitiveness ultimately comes down to interest rates and contributions, and because of Seoul City's demanding conditions, it is noted that the winning bank will inevitably face significant expenses.

Seoul City plans to select the treasury bank in mid-May through the Treasury Designation Review Committee, which is composed of industry experts and city council members. The presentation is scheduled for May 12. The bank that scores the highest in the category-specific evaluations will become the preferred negotiation partner for the next Seoul City treasury contract.

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