By Kim Jae-won
Shinhan Bank topped the government-invented innovation index among eight commercial banks by earning excellent scores in the fields of financing technology companies, reforming conservative practices and taking corporate social responsibility, the financial regulator said Wednesday.
The Financial Services Commission (FSC) said that the third-largest lender by assets in the country was ranked first with a score of 82.65 on a scale of 100, followed by Woori Bank with 76.8 and Hana Bank at 72.7. Foreign lenders scored the lowest as the Standard Chartered Bank Korea was ranked seventh with 49.2, and Citibank Korea recorded the lowest score of 44.5.
Among seven provincial lenders, Busan Bank led the index with 79.2 thanks to its superiority in the technology finance sector, both in quality and quantity. Daegu Bank came second by scoring 76.7, followed by Kyongnam Bank which had 70.45.
“We introduced the innovation index to transform conservative practices into innovative actions in the financial industry. With the index, I hope we can create an office culture in which creative bankers are respected,” said Shin Je-yoon at a meeting dubbed a “finance innovation conference.”
This is the first time that the authorities released such an index. Analysts said that it reflects the ideas of President Park Geun-hye, who has criticized the financial industry for maintaining a conservative corporate culture which weighs on the economy. Park has also emphasized so-called technology financing, urging lenders to offer more loans for companies with their own technologies.
Bank officials said the new index favors lenders following the government’s policies earnestly while missing other key aspects of banks, such as the ratios of non-performing loans and delinquency.
“This is a kind of index which evaluates who is the most-friendly bank to the government. I cannot understand why the FSC is obsessed with the so-called technology finance,” said a manager of a local lender, asking not to be identified.
The government also pushed the lenders further, asking them to reflect scores of employees and executives in their evaluations for salaries and promotions. That prompted a fierce response from bankers.
Employees and executives in local lenders complained that the index hurts the autonomy of banks and puts lenders more under the government’s control.