Gwangju City, Announcement on 26th and Briefing Session on September 3rd
Gwangju Bank - Commercial Banks, Anticipated Fierce Competition
"Seize the Gwangju City Treasury worth 8 trillion won."
As the contract period for the Gwangju City treasury ends at the end of this year, a fierce battle for acquisition is already showing signs of igniting between the current Gwangju Bank, which aims to retain it, and commercial banks trying to take it away.
On the 26th, Gwangju City announced in a press release that it will issue a public notice for the selection of the city treasury for the next four years (2025?2028) and hold an explanatory meeting for financial institutions by September 3.
In particular, Gwangju City is expected to see even fiercer competition as it has separated the application process for the 1st and 2nd treasuries, unlike the previous method of accepting joint applications, adding the burden of 'cooperation project expenses.'
So far, Gwangju Bank has managed the 1st treasury, while the 2nd treasury has been handled by a commercial bank, Kookmin Bank.
Gwangju Bank, leveraging its advantage as a regional bank based in Gwangju and Jeonnam, has held the 1st treasury position for 55 years since 1969, but there are already rumors that it will face fierce challenges from commercial banks this year. This reflects an assessment that the situation is not as favorable as before.
Especially, Gwangju Bank must enter the competition bearing the burden, as it was criticized during last year's city council administrative audit for having the lowest fulfillment of the promised cooperation project expenses (4 billion won) among special and metropolitan cities nationwide when selecting the treasury. This means it faces strong challenges from commercial banks.
Moreover, if Gwangju Bank loses the bid for the city treasury, it is deeply concerned because it could affect the selection process for treasuries in other autonomous districts.
Meanwhile, applications for the treasury are open to financial institutions with headquarters or branches in the Gwangju area. For the 1st treasury, banks under the Banking Act can apply, and for the 2nd treasury, banks eligible for the 1st treasury application as well as regional agricultural cooperatives, credit unions, and Saemaeul Geumgo and other secondary financial institutions can apply.
Financial institutions wishing to participate can submit their application forms and proposals directly to the Gwangju City Taxation Division on September 23 and 24.
After receiving proposals, the treasury designation review committee will review them in October, designate the treasuries, and plan to conclude treasury contracts in November.
The treasury selection method has changed from the previous integrated public offering method, which accepted joint applications for the 1st and 2nd treasuries and selected the 1st and 2nd ranked treasuries, to a separated public offering method that accepts separate applications for the 1st and 2nd treasuries and selects the highest-ranked bank for each treasury.
If selected as the next treasury, the 1st treasury will manage funds for the general account, special accounts (10), and one fund, while the 2nd treasury will manage funds for special accounts (4) and 18 funds.
The treasury evaluation assesses five areas: internal and external creditworthiness and financial structure stability of the financial institution (27 points), Gwangju City loan and deposit interest rates (20 points), convenience for citizens (24 points), treasury management capability (22 points), and contribution to the local community and cooperation projects with Gwangju City (7 points).
On July 1, Gwangju City revised the city treasury designation ordinance to reflect 'regional reinvestment' such as local fund supply, support for loans to small and medium enterprises, small business owners, and low-income citizens, as well as the 'safety indicators' of financial institutions in the treasury evaluation criteria.
Currently, Gwangju City's 1st treasury is managed by Gwangju Bank, and the 2nd treasury by Kookmin Bank.
This year, Gwangju City's budget totals 8.21 trillion won, including 6.3975 trillion won in the general account, 1.3793 trillion won in special accounts, and 433.2 billion won in funds.
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