[1mm Financial Talk] Why Banks Spend Hundreds of Millions on 'Station Name' Shopping

"This translation is Hana Bank." Financial institutions are competing to purchase subway station names. Recently, financial companies have been actively participating in the paid station name co-branding projects conducted by Seoul Metro and others, successfully bidding for secondary station names. A secondary station name refers to an additional name attached next to or in parentheses alongside the subway station name.

Hana and Woori Acquire ‘Prime’ Station Names

According to the financial sector on the 29th, Hana Bank has become the new owner of Euljiro 1(il)-ga Station on Seoul Subway Line 2. Starting this October, Euljiro 1(il)-ga Station will be co-named as ‘Hana Bank Station.’ Euljiro 1(il)-ga Station serves 22 million passengers annually and is a location where major domestic financial companies are concentrated. Exits 1 and 2 of Euljiro 1(il)-ga Station connect directly to Hana Bank’s headquarters, and within the Hana Financial Group Myeongdong building adjacent to Exit 5, affiliates such as Hana Card, Hana Life Insurance, Hana Alternative Asset Management, Hana Fund Service, and Hana F&I are located. It is reported that Hana Bank engaged in fierce competition with IBK Industrial Bank of Korea in this bidding. IBK, which had been the owner of Euljiro 1(il)-ga Station since 2016, has now yielded its position to Hana Bank.

Woori Bank also acquired the secondary station name for Myeongdong Station. From September, various guide signs and in-train announcements will use the name ‘Woori Financial Town Station’ alongside Myeongdong Station. Currently, more than 3,000 employees of Woori Financial Group, including Woori Financial Group, Woori Bank, Woori Investment & Securities, Woori FIS, and Woori Financial Research Institute, work near Myeongdong Station.

Besides Hana Bank and Woori Bank, major financial companies also hold at least one ‘secondary station name.’ For example, KB Financial Group signed a contract in 2020 with Seoul Metro for the paid co-branding of Saetgang Station on Line 9. The name ‘KB Financial Town Station’ is used alongside Saetgang Station on various guide signs and in-train announcements. Additionally, Jonggak Station on Line 1 is co-named by SC First Bank, Euljiro 4(sa)-ga Station on Lines 2 and 5 by BC Card, Euljiro 3(sam)-ga Station on Lines 2 and 3 by Shinhan Card, and Aekyung Savings Bank recently won the bid for Seolleung Station.

Station Name Rights Worth Tens of Millions of Won

The price of secondary station names varies greatly depending on passenger traffic, but usually amounts to several hundred million won. According to the online public asset disposal system Onbid, Hana Bank won the bid for Euljiro 1(il)-ga Station at 800 million won. The previous owner, IBK Industrial Bank of Korea, initially paid 381 million won at the first contract and later extended it once, paying 430 million won. This time, Hana Bank offered nearly double that amount. Myeongdong Station, acquired by Woori Bank, was won at 654.66 million won, and Seolleung Station, co-named with Aekyung Savings Bank, was won at 751 million won. Typically, the contract period is three years with one possible extension.

Banks engage in this ‘station name’ shopping because it offers significant promotional effects and can enhance brand image. Continuous exposure at subway stations used by the entire population allows advertising to all age groups. Moreover, if a company’s name is recognized as a major station in downtown Seoul, it helps build trust. In fact, SC First Bank saw about a 3% increase in brand awareness after co-naming Jonggak Station, according to its own survey. Especially, Euljiro 1(il)-ga Station, secured by Hana Bank, has recently become popular among young people under the nickname ‘Hipjiro,’ enabling the bank to target brand awareness improvement among the MZ generation (Millennials + Generation Z). A financial industry official said, "For banks and card companies competing with similar products, trust and brand awareness are very important," adding, "They aim to secure station names to gain promotional effects and to establish an image as a central company in the financial sector."