Provincial Banks Give More to Society

It has been brought to attention that provincial banks are more involved in social contributions compared to larger commercial banks or government-run banks. A survey on donations and endowments relative to net income showed higher results for provincial banks.

According to the “Report of Social Service and Contribution Activity Status of Financial Companies” submitted to Suh Hae-suk, Uri Party member of the National Assembly, by the Financial Supervisory Service (FSS) yesterday, the contributions/endowments rate compared to net income was an average of 1.47 percent (125.8 billion won) for seven commercial banks: Kookmin, Shinhan, Woori, Hana, Korea Exchange, SC First, and Citibank Korea.

The social contribution rate compared to net profit was even lower for the three government-run banks, Korea Development Bank, Korea Eximbank, and the Industrial Bank of Korea, at 0.12 percent (4.2 billion).

Contrastingly, the contribution rate of six provincial banks, Pusan, Kwang Ju, Daegu, Kyongnam, Jeonbuk, and Jeju Bank, was much higher at 5.0 percent (32.4 billion).

These numbers were obtained from calculations made by the FSS last year regarding the contributions and endowments of 92 financial institutions including banks, insurance companies, stock companies, and financial holding companies.

Contributions mean money paid with no form of compensation, such as donations to social welfare organizations or relief funds for flood victims. Endowments are the operating expenses of public organizations run by the company such as scholarship foundations and sponsoring culture and the arts.

jarrett@donga.com