Banks Compete for 212 Trillion Won in Retirement Pensions, with NongHyup Leading in Returns

The retirement pension assets of the five major banks have surpassed 212 trillion won. As the stock market rally drives more aggressive investing by retirement pension subscribers, banks are stepping up efforts to attract retirement pension accounts as part of their strategy to strengthen non-interest income.
According to the Integrated Pension Portal of the Financial Supervisory Service (FSS) on the 28th, the total retirement pension assets held by KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and NH Bank stood at 212.4108 trillion won at the end of the first quarter this year. The figure includes defined benefit plans, defined contribution retirement pensions and individual retirement pensions, and was up 16.7% from a year earlier, or 30.4215 trillion won.
Shinhan Bank had the largest retirement pension assets at 54.7391 trillion won. It was the first bank in the industry to surpass the 50 trillion won mark. KB Kookmin Bank and Hana Bank followed with 49.351 trillion won and 49.3037 trillion won, respectively, putting them just shy of 50 trillion won. Hana Bank, in particular, posted the fastest growth, with a 19.5% increase from a year earlier. Woori Bank and NH Bank recorded 31.7121 trillion won and 27.3049 trillion won, respectively, and both also saw sharp gains.
A banking industry official said, "The generation most actively building retirement pension assets is people in their 40s and 50s," adding, "Banks are continuing aggressive marketing competition because they can secure fee income and, in the long term, benefit from attracting new customers."
In the retirement pension market, NongHyup Bank is seen by consumers as the top performer in returns. As of the first quarter this year, NongHyup Bank's individual retirement pension return for a one-year principal-guaranteed product stood at 24.82%. It was followed by KB Kookmin Bank at 22.11%, Woori Bank at 20.40%, Shinhan Bank at 18.45% and Hana Bank at 17.56%.
For defined contribution retirement pension products, NongHyup Bank also posted the highest principal-unprotected return at 24.92%, followed by Woori Bank at 23.29%, KB Kookmin Bank at 22.62%, Shinhan Bank at 22.14% and Hana Bank at 20.64%.
A NongHyup Bank official explained that the results came from actively reflecting feedback from the field through its nationwide branch network and upgrading its Default Option portfolio. The official added that digital support, including its robo-advisor discretionary service for individual retirement pensions and improvements to mobile channels, also helped boost returns.
Shinhan Bank also delivered strong results in long-term return categories, in addition to its large asset base. It posted a 5.17% 10-year return on DC principal-unprotected products, the only one among the five major banks to exceed 5%. Its 10-year return on individual IRP principal-unprotected products was also the highest among the five at 4.78%. A Shinhan Bank official said, "Based on balanced competitiveness across DB, DC and IRP products, we operate a lifecycle management system that covers DC management during employment, IRP after retirement and senior wealth management." The official added, "Through a wealth management infrastructure that links investment product lineups, branch consultation networks and non-face-to-face channels, we are improving the long-term performance of customers' assets."
Banks are focusing more on competition with securities firms and insurers than on rivalry among themselves. A banking industry official noted, "With the stock market performing well, funds are tending to flow toward securities firms," adding, "Insurance companies and securities firms began competing aggressively for retirement pension customers before banks did."
Banks have recently been working harder to attract retirement pension customers by offering various promotions, including lower fees and better accessibility. Woori Bank waives its management and asset management fees to 0% for customers who sign up for an IRP through its non-face-to-face channels. The current face-to-face IRP fee in the banking sector ranges from 0.19% to 0.26% per year.
KB Kookmin Bank has revamped its non-face-to-face retirement pension product trading service within the KB Star Banking app. The upgrade allows customers to view their holdings at a glance and handle additional purchases and sales in a single step. It also provides real-time exchange-traded fund price information to support investment decisions based on market data.
Hana Bank is also drawing customers with its robo-advisor discretionary investment service, a KakaoTalk-based customized investment portfolio service and an artificial intelligence solution for pension withdrawal planning.


mj@fnnews.com Park Moon-soo Reporter