Relocated Public Institutions in Busan Show Low Local Bank Usage for Third Straight Year

Public institutions that relocated their headquarters to Busan from the Seoul metropolitan area continue to show low engagement with local banks, with their usage rates hovering in the 10% range for the third consecutive year. This trend contrasts sharply with Busan-affiliated public institutions, which demonstrate a much higher reliance on local financial services.

A recent survey by the Busan Citizens Coalition for Economic Justice (BCCEJ) analyzed the banking practices of 46 public institutions relocated to Busan. Among the 34 institutions that disclosed their financial data, the average utilization rate of local banks stood at 18.4% in 2023, dropping to 14.4% in 2024, and slightly increasing to 20% last year. For the nine relocated institutions that provided information on their main banks, the rates were 12.4% in 2023, 11.3% in 2024, and 14.9% last year.

In stark contrast, 17 Busan-affiliated public institutions that shared their data reported local bank usage rates exceeding 60% for the past three years, reaching 75.4% in 2023, 63.3% in 2024, and 62.3% last year. Among the relocated institutions, the Game Rating and Administration Committee showed the highest utilization of Busan Bank, at 89% in 2023 and 100% in the following two years. The Korea Asset Management Corporation also increased its use of local banks significantly, from 0% in 2023 to 72.1% in 2024 and 41.8% last year.

However, several institutions, including the National Fisheries Quality Management Service and the Korea Maritime Institute, reported zero deposits with Busan Bank for three consecutive years. The BCCEJ argues that local banks are vital for regional economies, acting as a "capillary" by reinvesting local deposits into local small and medium-sized businesses. They are advocating for policy changes, such as incorporating local bank deposit performance into the criteria for contributing to regional development for relocated institutions and reflecting this in their management evaluations, to encourage greater use of local financial services.

“

Local banks serve as the capillaries of the regional economy, preventing capital outflow by re-lending deposits collected in the region to local SMEs and small business owners, and reinvesting most of their deposits back into the region.