SEOUL, Jan. 30 (Korea Bizwire) — The Financial Services Commission (FSC) has ranked CitiBank and Standard Chartered low on the list of the most innovative banks in Korea. According to the FSC’s report on Korean banks’ innovative values in the second half of 2014, revealed on January 28, Shinhan Bank ranked first, followed by Woori Bank and Hana Bank. While KB Kookmin Bank ranked 6th, Standard Chartered and CitiBank ranked 7th and 8th respectively.
The list was created based on three financial innovative values: technology financing, improvement of old financial customs, and management of corporate social responsibility (CSR). Shinhan Bank received the most points in terms of all three innovative values.
Among the list for provincial banks in Korea, Busan Bank, Daegu Bank and Kyongnam Bank ranked high on the list, while Jeju Bank and Suhyup Bank were at the bottom.
While Nonghyup was evaluated to be strong at supporting startups, Korea Exchange Bank (KEB) and Hana Bank were strong at credit financing. Nonghyup and KEB were also recognized for their impressive management of CSR while Shinhan Bank, Hana Bank and Woori Bank were highly regarded for actively changing old credit routines.
The FSC is planning to incentivize banks ranked high on the list with a reduction of 10 billion won (US$ 9 million) in required contributions to various funds. For banks that earned high scores for technology financing, the FSC is to give tax cuts on their contributions to a credit guarantee fund and skill guarantee fund. The FSC will provide banks strong at investments with incentives for their on-lending businesses. The FSC is also going to tie the evaluation results to the amount of merit increases for executives of the banks.
In total, Shinhan Bank will be exempted from paying 7 billion won (US$ 6 million) in fund contributions, while Woori Bank will be saving 2.3 billion won (US$ 2 million). However, Citibank and Standard Chartered will see increased fund contributions, at 2.8 billion won (US$ 2.5 million) and 4.7 billion won (US$ 4.2 million) respectively.
Regarding the FSC’s scheme, a vice chairperson of one bank said that the policy might result in the FSC invading the managerial autonomy of private banks.
By J.W. Choi (email@example.com)