It was found that the amount of bank bonds issued by the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup Bank) over the past three months reached about 25 trillion won. The industry noted that this is to raise funds to supply various policy finance such as productive finance.
According to the financial sector on the 7th, the five major banks issued 24.9 trillion won in bank bonds over about three months since June this year. From January to May, bank bond issuance was 19.01 trillion won, or around 4 trillion won per month, but it has surged recently. For the banking sector as a whole, cumulative bank bond issuance through August this year was 183.5 trillion won, 38.4% more than the same period last year (132.6 trillion won).
A commercial bank official said, "There has been a more proactive push to raise funds than before to supply policy finance required by the government, such as productive finance and inclusive finance." The total amount of productive and inclusive finance that the five major financial holding companies plan to supply over the next five years is 508 trillion won. By holding company, KB Financial Group(105560) 110 trillion won, Shinhan Financial Group(055550) 110 trillion won, Hana Financial Group(086790) 100 trillion won, Woori Financial Group(316140) 80 trillion won, and NH Nonghyup 108 trillion won.
The Financial Services Commission plans to release this month a "comprehensive evaluation system for inclusive finance performance" to assess the status of inclusive finance implementation. Based on the evaluation scores, banks will be divided into five grades, with top-performing banks seeing their contribution rate to the policy finance fund for low-income households lowered, and underperforming banks seeing their contributions increased.
Industrial Bank of Korea (IBK)(024110), and state-run banks such as Korea Development Bank issued around 62 trillion won and 43 trillion won in bank bonds, respectively, from January to August this year. Because state-run banks have smaller deposits than commercial banks, they are issuing more bank bonds to supply policy finance.