Shinhan top in productivity

By Kim Jae-kyoung

Shinhan Bank ranked the highest in productivity among local lenders in the first half of this year on the back of a robust business performance based on preemptive risk management.

According to data based on first-half business results from banks, eight major lenders _ Kookmin, Shinhan, Woori, Hana, Korea Exchange Bank (KEB), the Industrial Bank of Korea (IBK), SC First and Citibank Korea _ saw their per capita net profit nearly double to an average of 40.26 million won.

Per capita net profit, an indicator of productivity, is determined by dividing total net profit by the number of employees. Eight banks, with a total payroll of 91,609, marked combined net profit of 3.68 trillion won in the first half of the year.

By bank, per capita net income for Shinhan, the nation’s third largest lender by assets, reached 73.48 million won between January and June, well above the industry average and 10 times greater than that of Kookmin, which posted only 6.67 million won due to losses in the second quarter.

KEB came in second with 71.82 million won, followed by the IBK (69.09 million won), Hana (48.32 million won), Citibank (40.99 million won), SC First (32.89 million won) and Woori (32.54 million won.

“The gap between banks in productivity has been widening as some lenders had to set aside a large amount of loan loss reserves due to losses associated with project financing (PF) loans,” a local bank representative said.

Shinhan has little exposure to PF loans as it reduced such lending in advance before the property market slump, while Kookmin and Woori are suffering from the fallout of their aggressive lending to construction businesses in the past.

Despite the widening gap, there was little difference in paychecks among the eight lenders. Shinhan’s per capita salary stood at 30.8 million won during the first half, compared to Kookmin’s 27.9 million won. The productivity difference between the two was 66.81 million won.

Citibank employees received the fattest paycheck with an average per capita salary of 36 million won, followed by SC First (31 million won), Shinhan and KEB (30.7 million won). Hana reported the least amount of 23 million won.

“Despite the difference in productivity, banks’ paychecks are not varied as bank unions collectively have wage talks with management,” the bank official said. “In order to pump up morale, the pay should be commensurate with productivity.”