Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Green financing, offline operations critical for banks to become Seoul's next 'safekeeper'
Overview of former and current Seoul City Hall offices / Korea Times file
By Yi Whan-woo
By Yi Whan-woo
KB Kookmin, Shinhan and Woori banks are competing in a bid to manage the Seoul Metropolitan Government's coffers for the next four years, with their commitments to carbon neutrality as well as offline operations newly added to the list of qualification criteria.
The city government came up with the new criteria amid toughened climate goals and the resulting rise in global financing, such as bonds, loans and equity funds targeting sustainable development projects.
The city government is geared toward reducing greenhouse gas emissions, as well. In January, it announced plans to cut emissions by 2026 to 3,461 tons, down 30 percent from 2005 levels.
It will also evaluate offline bank operations, as it wants to ensure that citizens have easy access to tax payment and financial services through retail banking branches and ATMs.
Such access is seen as crucial, considering many senior citizens struggle to cope with digital banking services that grew fast in response to the increase in social distancing rules due to the pandemic.
Monday was the deadline for bidding, and the successful bidder will be announced within this week, according to public relations representatives of the three banks.
Also included in the criteria are the banks' credit ratings, financial soundness, interest rates for loans and deposits, competence as a “safekeeper,” online banking security and community service record.
“We're taking into account newly added criteria in our presentation and remaining qualification process, while every criterion remains equally important,” a public relations representative told The Korea Times, Tuesday.
Citing sensitivity of the issue, the banks did not disclose their strategies to highlight green financing and offline bank operations.
Woori Bank has 344 retail banking branches in Seoul, which is more than those of its two closest competitors, according to the industry sources.
Shinhan Bank leads in terms of the number of ATMs in the nation's capital, with 2,094.
KB Kookmin Bank, meanwhile, announced in March that it will extend the operating hours for 72 of its retail banking branches nationwide by two extra hours to 6 p.m.
The banks are attracted to the marketing effects of becoming the safekeeper of Seoul Metropolitan Government, given that its annual budget amounts to 47.7 trillion won ($38.6 billion). The figure is the highest among all local governments across the country.
The successful bidder will keep the city's coffers from 2023 to 2026.
Shinhan Bank has been the safekeeper since 2018 after the winning the bid against Woori Bank back then.
Previously, Woori Bank was considered the sole safekeeper for the Seoul municipalities beginning in the colonial era in the 1910s when its predecessor managed the budget for Japanese imperialists ruling the city.
This is the first time KB Kookmin Bank has joined the bid.