[Exclusive] What Did the Heads of the Six Major Banks Say When They Met Lee Jae-myung?

Sharing Issues Without Pressuring for Win-Win Finance
IBK Industrial Bank Emphasizes Serious Difficulties of Small Business Owners
NH Nonghyup Bank: "Public-Private Efforts Needed for Credit Rating Management"
Hana Bank Stresses the Need to Overcome Domestic Demand and Ensure Exchange Rate Stability
Woori Bank: "Policy Support Should Lead to Increased Consumption"
Calls for Regulatory Authorities to Consider Foreign Exchange Risk Cost Burdens

The heads of the six major banks met with Lee Jae-myung, leader of the Democratic Party of Korea, and shared various opinions based on the state of the Korean economy. As Lee expressed his intention to listen to the concerns of the banking sector, they shared their situations.

According to a compilation of reports on the 21st, at the 'On-site Meeting for the Recovery of the People’s Economy' held the previous day at the Bankers' Hall in Jung-gu, Seoul, Cho Yong-byeong, chairman of the Korea Federation of Banks, and the heads of the six major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup, and IBK Industrial Bank) held a private meeting to share various banking sector issues.

Kim Seong-tae, president of IBK Industrial Bank, diagnosed the difficulties faced by small business owners and SMEs and proposed solutions. Kim said, “Their biggest challenges are sluggish sales and cost burdens,” explaining that “retail stores and restaurants face sharply rising raw material prices but cannot raise retail prices, which greatly worsens their financial situation.” He also noted that since the second half of last year, delinquency rates among small business owners have increased, and despite IBK injecting 65 trillion won, it has not been sufficient, with high interest rates further increasing financial costs. To address this, he emphasized the need to clearly distinguish the creditworthiness of small business owners and self-employed individuals and to secure transaction data to immediately assess actual credit ratings. He also expressed the need to reduce credit risks for small business owners through institutions like the Credit Guarantee Fund.

Kang Tae-young, president of NH Nonghyup Bank, mentioned considering the public interest function of Nonghyup Bank’s unique role in supporting agricultural activities and expressed concern over the poor soundness of the secondary financial sector and mutual finance. He suggested that since international credit rating agencies’ evaluations are important, it would be beneficial for both the public and private sectors to work together to manage domestic credit ratings.

Lee Jae-myung, leader of the Democratic Party of Korea, Cho Yong-byeong, chairman of the Korea Federation of Banks, and heads of commercial banks attended the "Democratic Party-Banking Sector On-site Meeting for Livelihood Economy Recovery" held on the 20th at the Bankers' Hall in Jung-gu, Seoul, posing for a photo before the meeting began. Photo by Yoon Dong-ju

Lee Ho-sung, president of Hana Bank, stated that uncertainty has been maximized amid the difficulties faced by small business owners, leading to a domestic demand “cliff,” and emphasized, “Overcoming domestic demand is ultimately necessary for everyone to overcome the crisis.” He also reportedly stressed the necessity of exchange rate stability.

Jung Jin-wan, president of Woori Bank, expressed hope that policy support such as interest rate cuts would lead to increased consumption. Jung emphasized, “(Policy) support needs to create a virtuous cycle where loan repayments lead to new loans.”

Jung Sang-hyuk, president of Shinhan Bank, said that domestic financial regulations could become obstacles when expanding overseas and requested support to allow for active and bold actions. He also reportedly said, “It would be good if regulatory authorities could consider the burden of foreign exchange risk costs.” Lee Hwan-joo, president of KB Kookmin Bank, briefly responded that he would seek win-win solutions for small business owners.

Meanwhile, before the meeting, Lee met with IBK Industrial Bank labor union members who were holding a picket protest and received a letter urging the resolution of the general strike situation. Later, during the private meeting, Lee asked President Kim Seong-tae related questions and mentioned the need for institutional improvements such as total labor cost management.