The fierce competition among banks to win Seoul district treasury contracts has gone quiet this year.
In district after district, the incumbent bank has been the only bidder when treasury contracts came up for renewal.
As recently as 2018, Woori Bank operated all treasury accounts for the Seoul Metropolitan Government and all 25 autonomous districts. Competition began in earnest when Shinhan Bank moved in, securing the city-level treasury account and several district accounts, including Yongsan-gu.
The 2022 round of district treasury selections also drew competitive bids, with Shinhan Bank and KB Kookmin Bank among those vying for operating rights.
This year is different. No bank other than incumbent Shinhan Bank submitted a bid for the Gangnam-gu treasury contract. In Seocho-gu, Shinhan Bank was again the sole bidder, triggering a sole-source contract process.
In Dongdaemun-gu, incumbent KB Kookmin Bank was the only bidder and signed a contract last week. Seongdong-gu saw no challengers to Shinhan Bank either.
Banks cite profitability concerns as the main reason for sitting out the bidding. "When you add up the contribution fees pledged at bidding and the various event sponsorships on top of that, the losses are not small," said a branch manager who oversees a district treasury operation.
As the cost burden of running a district treasury has grown, banks appear to have less incentive to enter a competition just to wrest operating rights away from a rival.
seouldream01@heraldcorp.com
