The selection of Incheon Metropolitan City's next treasury bank — the first since Mayor Park Chan-dae took office leading the ninth directly elected city administration — has emerged as the biggest issue in the local financial sector.
Shinhan Bank and Hana Bank are expected to square off in a fierce contest for the right to manage the city's annual budget and funds worth 17 trillion won ($11.9 billion), with close attention on how the Park administration's policy priorities will shape the outcome.
Incheon City plans to convene a treasury designation committee this month to make a final selection for the No. 1 and No. 2 treasury banks.
The chosen banks will manage the city's general and special accounts as well as its funds for four years, from 2027 through 2030.
A contest of 'policy partners'
Financial industry observers expect a two-horse race for the No. 1 treasury slot between Shinhan Bank, which has operated the city treasury for roughly 20 years, and Hana Bank, which is mounting an offensive on the strength of Hana Financial Group's relocation to Incheon's Cheongna International City.
Shinhan Bank is highlighting its experience managing the city's No. 1 treasury since 2007 — handling local tax collection, revenue and expenditure management, and various administrative IT systems — as its chief advantage.
Its track record of managing large-scale public finances and the operational expertise accumulated over the years are seen as strengths rival banks would find difficult to match.
Hana Bank, by contrast, is making an all-out push to reclaim the treasury designation, positioning itself as a community-rooted financial institution following Hana Financial Group's move to Cheongna International City in the Incheon Free Economic Zone.
Its core differentiating strategy centers on commitments to revitalize the local economy, expand investment, and carry out social contribution projects — all aimed at demonstrating a deeper stake in the community.
Hana Bank's local support initiatives draw growing attention
Hana Bank has been pouring resources into community engagement of late. The bank kept a relatively low profile after establishing its headquarters in Cheongna International City, but has become noticeably more active as the treasury bid draws near.
Recently, the bank delivered essential summer supplies to vulnerable residents struggling with the heat wave and launched a group-wide campaign featuring major affiliates — offering local economic revitalization events, tailored financial benefits for customers, and social contribution activities.
The bank also contributed 2 billion won to the Incheon Credit Guarantee Foundation as a special fund to support small and medium-sized enterprises and small business owners, among a range of initiatives that have become increasingly visible of late.
Because this treasury selection is the first under the ninth directly elected Park administration, there is also considerable interest in how the outcome will align with the city government's policy direction.
The ninth administration's governing philosophy as a variable
Since taking office, Mayor Park has put forward the cultivation of future industries — including AI, biotech, content and energy — along with the recovery of people's livelihoods and the revitalization of the local economy as his core governing priorities.
Against that backdrop, financial industry insiders expect evaluation criteria to go well beyond simple interest rate competition. Financial support plans tied to city policy — such as backing for local businesses, financing for small merchants, youth startup support, and investment in future industries — as well as community contribution plans are expected to play a significant role in the assessment.
However, the financial sector broadly agrees that political considerations alone are unlikely to determine the outcome. The treasury designation committee selects the winning bank through a comprehensive evaluation of financial soundness, treasury management capability, deposit and lending rates, public accessibility, and community contribution — all governed by relevant municipal ordinances and Ministry of Interior and Safety guidelines.
Fairness concerns also draw scrutiny
Questions about fairness have also been raised recently after Incheon City solicited financial support and cooperation proposals linked to the ninth administration's campaign pledges from banks planning to bid for the treasury contract.
The city maintains that it was reviewing potential policy cooperation arrangements unrelated to the treasury evaluation, but some voices have called for stronger safeguards to ensure the objectivity and transparency of the assessment.
"This treasury selection is not simply a competition for operating rights — it also carries the meaning of choosing a policy partner to lead Incheon's local economy alongside the city for the next four years," a financial industry official said. "Shinhan Bank's stability and operational experience, and Hana Bank's community contribution stemming from its Cheongna relocation, will be the biggest variables."
The result is expected to be announced this month, and the local financial sector is watching closely to see whether Shinhan Bank's nearly two-decade hold on the No. 1 treasury slot will continue — or whether Hana Bank will emerge as the new steward by capitalizing on its Cheongna relocation.
gilbert@heraldcorp.com
