Banks' Management Status Disclosure Report by Korea Federation of Banks
Average Salary of Employees at Five Major Commercial and Internet-Only Banks Exceeds 100 Million Won
Average Severance Pay Alone Reaches 300 Million Won
Bank Profitability Indicator NIM Declines Due to Interest Rate Cuts
Interest Income at Five Major Banks Nears 40 Trillion Won as Loan Demand Increases
Last year, the average annual salary of employees at major commercial banks and internet-only banks exceeded 100 million won. In particular, executives were found to have earned an average labor income ranging from 200 million to 500 million won. Despite a reduction in net interest margin (NIM) due to lower interest rates, the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) recorded interest income close to 40 trillion won, resulting in record-breaking profits. With the exception of a few banks that do not operate a voluntary retirement program, the average severance pay was found to be around 300 million won per person.
Banks with Billion-Won Salaries... KB Kookmin Tops the List
According to the 'Management Status Disclosure Report' published by the five major commercial banks and internet-only banks such as KakaoBank, K Bank, and Toss Bank on June 2 to the Korea Federation of Banks, the average labor income per employee at the five major banks was 115.42 million won. This figure surpassed 110 million won for the first time last year, with an average of 112.65 million won, and increased by about 2.77 million won compared to the previous year. The average annual salary of employees at the three internet-only banks also exceeded 100 million won. This report was prepared based on the recommendation of the 2023 Financial Authorities' 'Banking Sector Management, Business Practices, and System Improvement Task Force (TF)' that each bank voluntarily disclose management status such as revenue, expenses, and dividends annually.
Among the five major commercial banks and the three internet-only banks, KB Kookmin Bank had the highest average labor income per employee at 117.54 million won, while K Bank had the lowest at 95.82 million won. Hana Bank followed with 117.25 million won, Shinhan Bank with 116.11 million won, Nonghyup Bank with 114.93 million won, Toss Bank with 112.17 million won, Woori Bank with 111.29 million won, and KakaoBank with 111.15 million won paid as employee compensation.
The 'average labor income per executive' was also highest at KB Kookmin Bank (555.68 million won). This was followed by Hana Bank (360.26 million won), KakaoBank (341.60 million won), Toss Bank (267.73 million won), Woori Bank (246.25 million won), Shinhan Bank (230.41 million won), Nonghyup Bank (217.61 million won), and K Bank (154.13 million won).
Excluding banks among the five major commercial banks and the three internet-only banks that do not operate a voluntary retirement program, the average severance pay was around 300 million won per person. KB Kookmin Bank paid 370 million won, Toss Bank 317.06 million won, Shinhan Bank 312.86 million won, and Nonghyup Bank 300 million won.
Hana Bank Tops Net Profit... Toss Bank Records First Annual Surplus Since Launch
Last year, the net profit of the five major commercial banks totaled 13.7898 trillion won.
Among the five major commercial banks, Hana Bank ranked first in net profit with 3.1273 trillion won. This represents a 5.0% decrease compared to the previous year (3.2922 trillion won). Despite being the only major commercial bank to see a decline in net profit, it still ranked first. This was followed by KB Kookmin Bank (3.0736 trillion won), Shinhan Bank (3.0324 trillion won), Woori Bank (2.7946 trillion won), and Nonghyup Bank (1.7619 trillion won). Notably, Shinhan Bank's net profit growth rate stood out at 16.09%.
Although the net profit scale of internet-only banks was smaller than that of commercial banks, their growth rates were remarkable. Last year, KakaoBank's net profit was 440.1 billion won, up 24.81% from the previous year (354.9 billion won). K Bank posted 128.1 billion won in net profit, which, while smaller than KakaoBank, represented a dramatic 900.7% increase from the previous year. Toss Bank recorded its first-ever annual surplus since its launch, with a net profit of 46.7 billion won last year, turning profitable from a loss of 17.5 billion won the previous year.
KB Kookmin Earns the Most from Interest... Toss Bank Offers the Highest Loan Rates
Last year, the total interest income of the five major commercial banks was 38.9272 trillion won. Although NIM declined due to the onset of an interest rate cut cycle, the increase in loans such as mortgage loans is seen as a contributing factor.
By bank, KB Kookmin Bank earned 9.8224 trillion won from interest income alone last year, ranking first in interest income. This was followed by Shinhan Bank (7.5871 trillion won), Nonghyup Bank (7.5620 trillion won), Hana Bank (7.2139 trillion won), and Woori Bank (6.7418 trillion won).
KB Kookmin Bank explained, "Interest income increased due to asset growth from rising loan demand and active management of funding costs."
Among internet-only banks, KakaoBank's interest income last year was 1.3413 trillion won, up 17.9% from the previous year (1.1367 trillion won). KakaoBank explained, "Interest income increased by 204.6 billion won year-on-year as a result of asset growth driven by increased loan demand." Toss Bank's interest income surged 37.7% to 764.1 billion won from 554.8 billion won the previous year. K Bank's interest income rose 6.9% to 481.5 billion won from 450.4 billion won the previous year.
Loan Rates Drop in Line with Rate Cuts... NIM Also Shrinks
As the base interest rate fell, market interest rates also declined, leading to a drop in all lending rates. As a result, NIM, a key profitability indicator for banks, also decreased.
Last year, among the five major commercial banks and the three internet-only banks, Toss Bank had the highest average interest rate on new won-denominated loans at 6.12%. This was followed by KakaoBank (4.92%), Hana Bank (4.76%), Shinhan Bank (4.66%), Woori Bank (4.64%), Nonghyup Bank (4.61%), KB Kookmin Bank (4.52%), and K Bank (4.39%). Toss Bank's aggressive loan expansion is seen as contributing to its turnaround to profitability.
NIM declined at all major banks last year due to the drop in base and market interest rates. Nonghyup Bank's NIM was 1.88%, down 0.08 percentage points from the previous year. This was followed by KB Kookmin Bank at 1.78% (down 0.05 percentage points), Shinhan Bank at 1.58% (down 0.04 percentage points), Hana Bank at 1.47% (down 0.12 percentage points), and Woori Bank at 1.44% (down 0.12 percentage points).
Among internet-only banks, KakaoBank recorded 2.16% (down 0.22 percentage points), K Bank 1.91% (down 0.44 percentage points), and Toss Bank 2.53% (up 0.35 percentage points). Toss Bank was the only one among the five major banks and internet-only banks to see its NIM increase.
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