Kookmin Bank secures Songpa-gu, Gangdong-gu and Jungnang-gu in quick succession — a strategic play ahead of the Seoul city treasury bid in four years? Shinhan Bank holds Gangnam-gu, Seocho-gu, Seongdong-gu and adds Gangseo-gu; Woori Bank loses ground to KB and Shinhan.
Competition among banks for treasury contracts with Seoul's 25 autonomous districts is entering its midpoint — and the landscape is shifting.
Unlike the early rounds, when incumbent treasury banks largely ran unopposed to defend their positions, KB Kookmin Bank has moved aggressively into the fray, securing treasury contracts for Songpa-gu, Gangdong-gu and Jungnang-gu in quick succession and emerging as the dominant force reshaping the contest.
Reporting across Seoul's district offices shows that the early rounds of treasury selections saw many incumbents retain their positions through uncontested bids — Shinhan Bank in Gangnam-gu and Seocho-gu, KB Kookmin Bank in Dongdaemun-gu, and Shinhan Bank again in Seongdong-gu.
As the process moved into its middle stages, however, KB Kookmin Bank's ambitions became harder to ignore. After locking up Songpa-gu, Gangdong-gu and Jungnang-gu, the bank is now pushing into Gangbuk-gu — where it is competing against Shinhan Bank — building on its existing treasury holdings in Nowon-gu and Dobong-gu.
Other banks are also making moves. In Yangcheon-gu, Hana Bank wrested the treasury contract from Woori Bank for the first time. Shinhan Bank claimed Gangseo-gu and has also thrown its hat into the ring for Gwangjin-gu, a district previously managed by KB Kookmin Bank. In Guro-gu, Shinhan Bank successfully defended its existing treasury position.
The biggest wild card in this competition remains KB Kookmin Bank. Its aggressive pursuit of new contracts is coming at a direct cost to Woori Bank, which has lost several districts it previously held.
On the surface, Seoul district treasury contracts look attractive to banks. Managing a local government's revenues and expenditures provides a stable transaction base and opens the door to long-term relationships with public institutions.
The reality of profitability, however, is a different matter. Banks competing for treasury contracts are expected to offer substantial contribution funds and cooperative project budgets, and to sponsor or underwrite various district festivals and events. When the interest rate terms applied to treasury funds are factored in, analysts say profitability can fall sharply depending on the bank.
When the cost of winning a contract runs into the tens of billions to hundreds of billions of won, recouping that investment from treasury operations alone is no easy task. Actual profit and loss will vary depending on the size of contribution funds, fund management terms and transaction volume, making it difficult to assess each bank's net position without more specific figures.
Even so, the most widely cited explanation for KB Kookmin Bank's aggressive push is a long-term strategy aimed at the far larger prize: the Seoul Metropolitan Government treasury contract, up for competition in four years.
Running district treasury operations allows a bank to accumulate hands-on experience in local government finance, build a track record in public-sector transactions and develop its public finance capabilities. Securing multiple district contracts could also broaden the foundation for expanding financial dealings with the city government itself.
The Seoul city treasury contract dwarfs anything at the district level. Some observers are therefore reading the current district competition not simply as a race for individual treasury rights, but as an opening move in a longer game — positioning for the Seoul city treasury bid down the road.
Woori Bank, by contrast, has focused on defending its existing contracts while losing ground in some contests. Whether that reflects a deliberate strategy of selectivity based on cost-benefit analysis, or a broader shift in competitive approach, remains to be seen.
Ultimately, the Seoul district treasury competition is about more than which bank wins how many districts. The deeper question is how broadly each institution can build its financial foothold with local governments — and what long-term strategy each is laying down for the far bigger contest over the Seoul city treasury.
How KB Kookmin Bank's aggressive campaign translates into results when that city-level competition arrives in four years will be closely watched.
seouldream01@heraldcorp.com
