Social contributions by financial groups hit record high in 2019

The combined spending by Korean financial institutions on social contributions hit a record high in 2019, data showed Tuesday. 

A total of 22 financial institutions in Korea, including five major local lenders and Korea Credit Guarantee Fund as well as Korea Housing Finance Corp., spent 1.3 trillion won ($935 million) on social contribution activities last year, the highest figure since 2006 when the Korea Federation of Banks started compiling relevant data.

The figure jumped 15 percent from some 900 billion won in 2018 with the largest amount of 557.9 billion won spent on microcredit programs. Microcredit refers to extremely small loans to low-income people.

In addition, banks and financial institutions supported public utilities and educational projects with 370.2 billion won and 101.1 billion won, respectively, while spending 86.9 billion won for cultural activities and sports events. 

“In 2018, the KFB announced a plan to boost social contributions in the finance sector under the initiative of spending 3 trillion won on diverse projects in three years and many local institutions have pushed ahead with social spending,” said an official. 

Among the country’s five major commercial banks -- KB Kookmin, Shinhan, Woori, Hana and NH NongHyup, Shinhan topped the list by spending 196.1 billion won on social contribution projects. 

KB Kookmin ranked second with 181.1 billion won, followed by NH NongHyup with 159.2 billion won. Woori and Hana spent 148.3 billion won and 138 billion won, respectively. 

Meanwhile, the data showed that nearly 4.3 trillion won was spent on loan projects for low-income families. However, loans are not regarded as corporate social activities, and are excluded from the KFB’s compiled data on social contributions in the finance industry. 

The KFB is an association promoting interests of the local banking industry. The organization has been releasing an annual publication titled “Corporate Citizenship Report” since 2006, providing data on social contributions made by local lenders and other financial institutions.

By Choi Jae-hee (cjh@heraldcorp.com)