You have to downsize to live … Banks that sell real estate

Kookmin Bank began selling dormant real estate, such as stores worth 18 billion won (based on the lowest bid price). Other banks are also joining the sale procession by selling closed stores and various real estate as short sale. It is an analysis that the “ downsizing ” of banks is serious, as finances have become not face-to-face since last year’s Corona 19 crisis.

A row of closed shops appears

According to the banknote of the 24th, Kookmin Bank announced the simultaneous sale of real estate in its seven branches and branches through Onvid, a real estate auction site. Sales targets include land and real estate in shops in Sindang-dong and Munjeong-dong, Chungnam Gongju and Nonsan, Yeongcheon, Gyeongbuk, Sangbang-dong, Gimhae, Gyeongnam and Singi-dong, Yeosu, Jeollanam-do. Including the building in Nonsan (5th floor, 4.7 billion won), the total minimum bid is 17.9 billion won.

It is the largest of the real estate sales that a national bank is promoting this year. A Kookmin Bank official explained: “It is selling real estate that has been closed until now and converting it into cash,” he said. “We are eliminating dormant real estate every year, but since last year, the target and the amount of sales has increased.”

The industry talks that not only Kookmin Bank, but also a large number of banks are selling real estate in a row. This is due to the number of branches closed due to fewer customers since the Corona 19 incident, and banks are also changing the store system by focusing on local stores. Last year, the amount of idle real estate disposed of through a short sale by six major banks (Kookmin Shinhan Hana Woori Nonghyup Corporation) was 127 billion won. It increased 2.6 times compared to 2019 (49 billion won). This year, a real estate property (Hana Bank) worth 22.9 billion won has already completed the sale. The scale of real estate these banks eliminated through voluntary contracts (one-to-one contracts) also jumped more than five times during the year from 30.2 billion won to 16.4 billion won in 2019.

Billetes explained that the procession of real estate sales increased rapidly as the Corona 19 incident dragged on.

This is because the steps of customers in each store have decreased significantly and the proportion of remote banking operations has increased rapidly. Big tech (big IT companies) like Naver and Kakao made a full breakthrough in finance, which also prompted the bank’s restructuring.

In particular, from August to September last year, bank-owned real estate worth 170 billion won a month came out as a short sale. At that time, Hana Bank released 27 and Kookmin Bank released 10 at a time. Sales targets included closed stores, inactive shopping centers, and buildings. A bank official said: “In the event of a crisis, it is more difficult to sell real estate that has invested a lot of money instead of leaving it unused, as it becomes difficult to use common facilities such as bedrooms, training centers and facilities sports I think there are many places that I judged better ”.

Like I sell more of this year

Starting this year, the scale of real estate sales by banks is expected to increase. As the number of offline customers decreases, each bank is reorganizing its stores on a regional basis. It is a way to increase efficiency by establishing representative branches in the region and consolidating stores with low demand. Kookmin Bank and Shinhan Bank have followed this system for several years, and Woori Bank also decided to operate stores this year in a value group (VG). Hana Bank has been undergoing extensive store reorganization and restructuring since 2017.

A large bank official said, “These days, even large stores like Seoul and Myeong-dong have become so busy that there is no longer a long wait after pulling out a number tag.” Demand from stores continues to decline. “Another bank official said:” In many cases, banks sell real estate as a short sale, but if it is sold multiple times, it can be sold as a series of contracts. ”

It is analyzed that the threat of large technologies is also encouraging banks to improve their constitution. Big banks are destined to lag behind in cost competition compared to high-tech finance companies because store operations and employee labor costs are fixed. The Operating Income Expense Ratio (CIR), which is the proportion of SG&A expenses (labor expenses plus rent, etc.) in operating profit, recorded 44-54% last year. In the future, Kakao Bank, which does not have a store, is expected to fall to the 30% level after listing.

A commercial bank executive said: “The environment in which banks downsizing and rapidly creating a digitally oriented business system can only survive.” Leave it alone, but this feature will be further improved. ”

Reporter Jeong So-ram [email protected]