KB Kookmin Bank, Yeouido, Seoul. Photo by Kang Jinhyung

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On June 2, according to the 'Management Status Disclosure Report' published by the five major commercial banks, as well as internet-only banks KakaoBank, K Bank, and Toss Bank on the Korea Federation of Banks website, the average employment income per employee at the five major banks was 115.42 million won. This marks the first time the average has surpassed 110 million won, up by about 2.77 million won from last year’s average of 112.65 million won. The average annual salary of employees at the three internet-only banks also exceeded 100 million won. This report was compiled based on the 2023 recommendations of the financial authorities' 'Banking Sector Management, Business Practices, and System Improvement Task Force (TF)' that each bank should voluntarily disclose its management status, including profits, costs, and dividends, every year.

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Among all employees at the five major commercial banks and the three internet-only banks, KB Kookmin Bank paid the highest average employment income per person at 117.54 million won, while K Bank paid the lowest at 95.82 million won. Hana Bank followed with 117.25 million won, Shinhan Bank with 116.11 million won, NongHyup Bank with 114.93 million won, Toss Bank with 112.17 million won, Woori Bank with 111.29 million won, and KakaoBank with 111.15 million won.

For executives, the highest average employment income per person was at KB Kookmin Bank (555.68 million won), followed by Hana Bank (360.26 million won), KakaoBank (341.60 million won), Toss Bank (267.73 million won), Woori Bank (246.25 million won), Shinhan Bank (230.41 million won), NongHyup Bank (217.61 million won), and K Bank (154.13 million won).

Excluding banks that do not operate a voluntary retirement program, the average severance pay per person among the five major commercial banks and three internet-only banks was about 300 million won. KB Kookmin Bank paid 370 million won, Toss Bank 317.06 million won, Shinhan Bank 312.86 million won, and NongHyup Bank 300 million won.

Yonhap News

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Last year, the five major commercial banks recorded a combined net profit of 13.7898 trillion won.

Hana Bank topped the five major commercial banks in net profit with 3.1273 trillion won, a 5.0% decrease from the previous year's 3.2922 trillion won. Despite being the only major bank to see a decrease in net profit, it still ranked first. KB Kookmin Bank followed with 3.0736 trillion won, Shinhan Bank with 3.0324 trillion won, Woori Bank with 2.7946 trillion won, and NongHyup Bank with 1.7619 trillion won. Notably, Shinhan Bank’s net profit growth rate stood out at 16.09%.

Although the net profit of internet-only banks was smaller than that of commercial banks, their growth rates were remarkable. Last year, KakaoBank’s net profit was 440.1 billion won, up 24.81% from the previous year’s 354.9 billion won. K Bank posted a net profit of 128.1 billion won, which, while smaller than KakaoBank’s, represented a staggering 900.7% increase year-on-year. Toss Bank recorded its first-ever annual profit since its launch, posting a net profit of 46.7 billion won last year, turning from a loss of 17.5 billion won the previous year.

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Last year, the five major commercial banks earned a total of 38.9272 trillion won in interest income. Although NIM declined due to the interest rate cut cycle, increased lending, including mortgage loans, contributed to the rise in interest income.

By bank, KB Kookmin Bank led with 9.8224 trillion won in interest income last year. Shinhan Bank followed with 7.5871 trillion won, NongHyup Bank with 7.5620 trillion won, Hana Bank with 7.2139 trillion won, and Woori Bank with 6.7418 trillion won.

KB Kookmin Bank explained, "Interest income increased due to the growth of interest-earning assets from higher loan demand and active efforts to manage funding costs."

Among internet-only banks, KakaoBank’s interest income last year was 1.3413 trillion won, up 17.9% from the previous year’s 1.1367 trillion won. KakaoBank stated, "This was a result of asset growth driven by increased loan demand, resulting in a 204.6 billion won increase year-on-year." Toss Bank’s interest income surged by 37.7% to 764.1 billion won from 554.8 billion won the previous year. K Bank’s interest income rose by 6.9% to 481.5 billion won from 450.4 billion won.

As the benchmark interest rate fell, market interest rates also declined, leading to a decrease in all loan interest rates. Photo by Getty Images Bank

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As the benchmark interest rate fell, market interest rates also declined, leading to a decrease in all loan interest rates. As a result, NIM, a key profitability indicator for banks, also declined.

Last year, among the five major commercial banks and three internet-only banks, Toss Bank had the highest average interest rate on new won-denominated loans at 6.12%. This was followed by KakaoBank (4.92%), Hana Bank (4.76%), Shinhan Bank (4.66%), Woori Bank (4.64%), NongHyup Bank (4.61%), KB Kookmin Bank (4.52%), and K Bank (4.39%). Toss Bank’s aggressive loan expansion is believed to have contributed to its turnaround to profitability.

NIM declined at all major banks last year due to the drop in benchmark and market interest rates. NongHyup Bank’s NIM was 1.88%, down 0.08 percentage points from the previous year. KB Kookmin Bank followed with 1.78% (down 0.05 percentage points), Shinhan Bank with 1.58% (down 0.04 percentage points), Hana Bank with 1.47% (down 0.12 percentage points), and Woori Bank with 1.44% (down 0.12 percentage points).

For internet-only banks, KakaoBank’s NIM was 2.16% (down 0.22 percentage points), K Bank’s was 1.91% (down 0.44 percentage points), and Toss Bank’s was 2.53% (up 0.35 percentage points). Toss Bank was the only bank among the five major commercial banks and internet-only banks to see an increase in NIM.