Shinhan Bank, First Voluntary Retirement in Banking Sector for New Year... Early-Year 'Cold Wind'

Special Severance Pay for Minimum 21 Months to Maximum 36 Months
Banking Sector Enhances Cost Efficiency Through Annual Voluntary Retirement and Branch Reduction

[Asia Economy Reporter Haeyoung Kwon] Shinhan Bank is conducting voluntary retirement for employees at the deputy branch manager level and above. This is the first voluntary retirement in the financial sector this year, following KB Kookmin Bank, which started voluntary retirement at the end of last year.

According to the financial sector on the 3rd, Shinhan Bank plans to accept voluntary retirement applications from employees at the deputy branch manager level and above until the 14th. Applicants for voluntary retirement will receive a special retirement allowance ranging from a minimum of 21 months to a maximum of 36 months' worth of pay.

The eligibility for voluntary retirement includes employees with more than 15 years of service as of the end of 2019, specifically ▲general employees at the deputy branch manager level or higher born after 1961 ▲general employees at grade 4 or below born in 1964.

The application period is from today until the 8th for employees at the deputy branch manager level and below, and from the 8th to the 14th for branch managers.

A Shinhan Bank official stated, "The scale of voluntary retirement will vary depending on the number of applicants," and added, "We plan to select part-time contract employees dedicated to management from among those who apply for voluntary retirement."

Banks conduct voluntary retirement annually alongside branch reductions to improve management efficiency. This is part of efforts to downsize and optimize costs amid anticipated worsening business conditions due to low interest rates, economic recession, and regulations.

At NH Nonghyup Bank, which accepted voluntary retirement applications last year, 370 employees left the company at the end of the year, and KEB Hana Bank reportedly had about 300 employees take voluntary retirement. Kookmin Bank accepted voluntary retirement applications from wage peak employees from the 31st of last month until today. Woori Bank also plans to conduct voluntary retirement.

Due to continuous reductions in personnel and branch numbers by banks, the number of domestic bank branches?including commercial banks, regional banks, internet-only banks, and specialized banks?decreased by 666 from 7,401 at the end of 2014 to 6,735 as of the end of September this year. The total number of employees excluding non-regular workers decreased by 7,991 from 118,913 to 110,922.

An official from a commercial bank said, "This year, due to low interest rates and economic downturn, the outlook for the financial industry is bleak, and the return on equity (ROE) target has been lowered compared to last year," adding, "We plan to maximize efficiency in terms of costs, including personnel and branch operations."

This content was produced with the assistance of AI translation services.