우리은행 is increasing the weight of profitability in its key performance indicators (KPIs). With first-half results falling short of expectations, the bank aims to improve performance in the second half through non-interest income and pensions.
According to financial industry sources on July 8, Woori Bank has raised the score for risk-adjusted return (RAR) from 200 to 240 points for its second-half KPIs. RAR measures profit after excluding direct and indirect costs, such as rent and salaries, from the bank's operating income. To increase the RAR score, the bank will need to boost interest income, fee income, and non-interest income.
The bank has also expanded the scoring for key customer indicators, assessing how well it encourages metrics related to the four major pensions, salary transfers, and card payments. The evaluation score for corporate loans has increased by 10 points compared to the first half of the year.
This shift towards a profitability-focused KPI is seen as linked to the reappointment of Woori Bank CEO Jeong Jin-wan, whose term ends in December.
In the first quarter of this year, Woori Bank's non-interest income fell by 36.6% compared to the same period last year, while small business loans decreased by 3.9%. Although the second-quarter results are expected to improve compared to the first quarter, industry consensus suggests that significantly increasing assets at once will be challenging. Reports indicate that the bank achieved only about 50% of its targets in the first half of the year.
If the upward trend in second-quarter results continues, Jeong's term extension is likely to be smooth. This has led to a management strategy emphasizing steady fee generation from pensions and non-interest income.
However, employees may face increased pressure as competition among banks for the pension and salary transfer markets intensifies. Once a customer is acquired, there are many instances where transactions expand to include cards, savings, and loans.
Additionally, as banks compete to expand productive finance, there are concerns that the burden to meet related evaluation metrics will also grow.
In conjunction with the KPI changes, Woori Bank has reorganized its structure to expand its customer base. It has merged the existing Personal Sales Strategy Department, Real Estate Finance Department, Channel Strategy Department, and MyData Platform Department into a new Retail Sales Division. This aims to unify the sales organization and strengthen both retail and corporate sales. Furthermore, Jeong has called for a reduction in sales management expenses as part of cost-cutting efforts.
A financial industry source stated, "It will take considerable time for the insurance company acquired by Woori Bank to generate results. While solidifying its foundation, the bank will focus on increasing immediate revenue through fees and other means."
According to financial industry sources on July 8, Woori Bank has raised the score for risk-adjusted return (RAR) from 200 to 240 points for its second-half KPIs. RAR measures profit after excluding direct and indirect costs, such as rent and salaries, from the bank's operating income. To increase the RAR score, the bank will need to boost interest income, fee income, and non-interest income.
The bank has also expanded the scoring for key customer indicators, assessing how well it encourages metrics related to the four major pensions, salary transfers, and card payments. The evaluation score for corporate loans has increased by 10 points compared to the first half of the year.
This shift towards a profitability-focused KPI is seen as linked to the reappointment of Woori Bank CEO Jeong Jin-wan, whose term ends in December.
In the first quarter of this year, Woori Bank's non-interest income fell by 36.6% compared to the same period last year, while small business loans decreased by 3.9%. Although the second-quarter results are expected to improve compared to the first quarter, industry consensus suggests that significantly increasing assets at once will be challenging. Reports indicate that the bank achieved only about 50% of its targets in the first half of the year.
If the upward trend in second-quarter results continues, Jeong's term extension is likely to be smooth. This has led to a management strategy emphasizing steady fee generation from pensions and non-interest income.
However, employees may face increased pressure as competition among banks for the pension and salary transfer markets intensifies. Once a customer is acquired, there are many instances where transactions expand to include cards, savings, and loans.
Additionally, as banks compete to expand productive finance, there are concerns that the burden to meet related evaluation metrics will also grow.
In conjunction with the KPI changes, Woori Bank has reorganized its structure to expand its customer base. It has merged the existing Personal Sales Strategy Department, Real Estate Finance Department, Channel Strategy Department, and MyData Platform Department into a new Retail Sales Division. This aims to unify the sales organization and strengthen both retail and corporate sales. Furthermore, Jeong has called for a reduction in sales management expenses as part of cost-cutting efforts.
A financial industry source stated, "It will take considerable time for the insurance company acquired by Woori Bank to generate results. While solidifying its foundation, the bank will focus on increasing immediate revenue through fees and other means."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.