INCHEON — The contest to manage 17 trillion won ($12.3 billion) of Incheon's finances over the next four years has narrowed to a head-to-head fight between Shinhan Bank and Hana Bank. Shinhan is defending turf it has held for 20 years, while Hana is pushing to shake up the field on the strength of its planned headquarters relocation, setting off an intense behind-the-scenes contest.
Incheon Metropolitan City said on the 3rd that Shinhan Bank and Hana Bank both submitted proposals for the primary treasury account after bidding closed at 6 p.m. on the 2nd. For the secondary account, which handles about 3 trillion won in other special funds, only incumbent NH Nonghyup Bank filed a proposal. Because it drew a single bidder, the secondary account bidding failed and will be re-advertised shortly under the rules governing local government treasury designations.
The primary account, which oversees 14 trillion won in general accounts, public enterprise special accounts and funds, is the main battleground and a matter of pride for the two large commercial banks. Shinhan Bank, which has held the primary account for nearly 20 years since 2007, is emphasizing its long record of stable management. Hana Bank, which is developing the Hana Dream Town complex in Cheongna International City, is stressing its community contributions and local ties as it looks to crack the monopoly.
Both sides carry clear strengths and risks, according to analysts. Shinhan must overcome fatigue with its long hold on the account and calls for change, while Hana must guard against accusations of cozy ties with the local government and preferential treatment that could surface alongside its large headquarters relocation project. The two banks waited until just before the deadline to file their documents to avoid revealing their proposed terms, underscoring the tension.
Proposals are scored out of 100 points. The breakdown covers credit standing and financial stability (25 points), convenience for residents (24 points), treasury management capability (24 points), lending and deposit rates (18 points), community contributions and cooperation projects with the city (7 points) and other factors (2 points).
Bankers say the gap between the two is negligible across the basic infrastructure categories — credit standing, computer networks and branch numbers — worth 73 points, leaving interest rates (18 points) and cooperation project spending (7 points) to decide the outcome. Incheon's treasury deposits currently earn 4.57%, the highest among the country's 16 metropolitan cities and provinces, making the decisive variable which bank offered a more aggressive combination of high rates favorable to city finances and social contribution funding.
Incheon will convene its treasury designation review committee starting next week to examine the proposals and conduct objective evaluations. The city plans to select the final treasury banks this month and sign formal agreements in October. The winning institutions will manage Incheon's funds for four years beginning in 2027.
