The pledge to transfer Industrial Bank of Korea (IBK) to a province, a perennial election-season theme for 12 years, is resurfacing ahead of the June local elections. Transferring Industrial Bank of Korea (IBK) would require changing the law, but observers say the necessity and rationale are insufficient, calling it "unrealistic." The Industrial Bank of Korea (IBK) labor union is also strongly opposed.
According to the political sphere on the 3rd, some politicians running as candidates for heads of local governments in the June local elections are pledging, "We will transfer Industrial Bank of Korea (IBK) to our region."
Kim Boo-kyum, a Democratic Party of Korea candidate for Daegu mayor and former prime minister, said in a recent media interview, "(If elected) I will push to transfer Industrial Bank of Korea (IBK) to Daegu. As more than 3,000 business sites with 10 or more employees in Daegu are all small and midsize corporations, it is a persuasive pledge." Park Myung-gyun, a People Power Party preliminary candidate for Jinju mayor, also said, "We will elevate attracting Industrial Bank of Korea (IBK) to Jinju to 'Gyeongnam Province's No. 1 priority issue.'"
Calls to move Industrial Bank of Korea (IBK)'s headquarters to a province began after its policy finance partner, Korea Credit Guarantee Fund (KODIT), transferred to Daegu in 2014. At the time, some Daegu-area politicians argued, "Following KODIT, shouldn't Industrial Bank of Korea (IBK) also come to Daegu?" but there was little response. Then, when the Democratic Party of Korea, which was the ruling party in 2018, released its "plan to transfer an additional 122 public institutions from the Seoul metropolitan area," including Industrial Bank of Korea (IBK), it became a full-fledged political topic.
To move Industrial Bank of Korea (IBK)'s headquarters, the law must be changed. Article 4, Paragraph 1 of the Industrial Bank of Korea Act states, "The Industrial Bank of Korea shall place its head office in Seoul." In Apr. 2019, an amendment to the Industrial Bank of Korea Act (introduced by then-Liberal Korea Party lawmaker Kwak Dae-hoon, among others) that included moving the head office to Daegu was proposed, but it was scrapped when the National Assembly's term expired. Since then, each election season has seen a repeat of calls for provincial transfer → related bill introduction → bill pending in the Assembly → bill scrapped.
A financial industry official said, "It feels like Industrial Bank of Korea (IBK) is becoming a scapegoat for regional balanced development pledges that surface every election season," adding, "If an actual transfer is pursued, considerable conflict and staff movement will occur, and it is questionable whether Industrial Bank of Korea (IBK) would retain its existing capabilities after making the move despite that."
An aide in the ruling party lawmaker's office on the National Policy Committee, which oversees Industrial Bank of Korea (IBK), said, "There has been no convincing explanation as to whether there is truly a need to transfer Industrial Bank of Korea (IBK). With many regions wanting the bank, if the party and government take it up in earnest, it appears internal conflicts will only grow."
The union is strongly opposed. Yoon Seok-gu, chairperson of the Korea Financial Industry Union, said in a statement in Apr., "(The transfer of Industrial Bank of Korea (IBK)'s headquarters) is chronic vote-'populism' by the government and politicians ahead of the June local elections." Since then, the Industrial Bank of Korea (IBK) union has formed a task force (TF) and is responding.
The biggest rationale for transferring public institutions—"population dispersal and revitalization of the provinces"—has proven to have minimal effect. According to statistics from the National Assembly Budget Office and others, the population dispersal effect from the first phase of public institution transfers, completed in 2019, was only about 10% of the target. Vacancy rates in commercial districts and industry-academia-research clusters near innovation cities around public institutions exceed 40%.