Humiliation of Bank PBs... Reputation Falls Amid 'DLF·Lime Fund' Mis-selling Controversy

Where Has the Former Glory Gone?
Trust Crisis Amid Declining Influence

Four Major Banks Have 575 PBs as of January
Annual Decrease Due to PB Avoidance
"Advanced Work Systems Needed"

[Asia Economy Reporter Kim Min-young] The number of private bankers (PBs) at the four major commercial banks has been steadily decreasing. This is attributed to the decline in the status of PBs, who were blamed as the main culprits in the overseas interest rate-linked derivative-linked fund (DLF) scandal that caused massive principal losses and the Lime Asset Management private fund 'mis-selling' controversy. Not only has their influence plummeted, but they are also facing a crisis of trust.

According to the financial sector on the 9th, the number of PBs at Shinhan, KB Kookmin, Hana, and Woori Banks was identified as 575 as of the end of January. The number of PBs has been gradually decreasing from 591 in 2017, 583 in 2018, to 579 last year.

This is interpreted as a phenomenon of avoidance toward the PB sector, which is experiencing a 'crisis of trust' following the DLF and Lime incidents. In fact, some banks seem to have a widespread culture where younger employees are reluctant to become PBs.

The average number of clients per major bank PB is about 50. The assets they manage amount to approximately 150 billion to 200 billion KRW. However, recently, they have been refraining from the kind of reputation marketing seen in the past and are designing product portfolios as conservatively as possible. A PB at a commercial bank said, "For older clients or those unfamiliar with investing, we provide explanations for more than an hour, and for clients who do not fully understand the products, we do not accept subscriptions at all."

This is a scene that emerged after the DLF incident. In October last year, a civic group filed a complaint with the prosecution against the bank presidents of commercial banks that caused principal losses in the DLF incident, along with the PBs who sold the bank products. Through this incident, a 'PB avoidance phenomenon' has appeared in the banking sector, where PBs must directly deal with customers. A banking official said, "Although becoming a PB requires meeting strict qualifications and is difficult, until recently, young employees wanted to become PBs," adding, "Now, even young employees avoid becoming PBs and prefer departments such as foreign exchange, digital, or global business."

PBs account for a significant portion of the bank's profit contribution. Especially recently, with low interest rates, banks need to expand non-interest income sources rather than relying on interest income, so they must strengthen wealth management (WM) for profitability. However, the attractiveness of the PB sector has greatly diminished due to successive financial accidents.

A branch manager A at a commercial bank, who was active as a 'first-generation star PB,' said, "I had the best days serving clients including CEOs of large corporations, celebrities, sports stars, and wealthy cash holders in Gangnam," adding, "Nowadays, junior PBs hesitate to engage in external activities, and such activities are not encouraged within the bank, so many have disappeared," expressing regret.

B, who works as a branch manager at a commercial bank in Gangnam, said, "While working as a PB, I experienced the 2008 global financial crisis and various domestic and international crises, but I never received complaints from clients due to fund losses," adding, "It is really difficult to be a PB in such a chaotic atmosphere nowadays. When bad news comes out, inquiries from clients flood in."

Experts advise that the PB work process, which has been conducted in a makeshift manner, needs to be transformed into an advanced system like those in developed countries. Above all, the outdated idea of just collecting fees should be abandoned, and it is time to maximize PB capabilities to improve customer returns.

Branch manager A emphasized, "If banks and PBs make painstaking efforts to improve the system and show sincerity to customers, they can overcome the current crisis." Branch manager B also said, "We should not be obsessed with performance alone and should design sales strategies as conservatively as possible."

Meanwhile, NH Nonghyup Bank, known as one of the five major banks, reportedly does not have a PB sector at all. This contradicts the bank's sales strategy to attract high-net-worth individuals through the WM center and expand the 'non-interest income' sector such as fees. Although the bank established an organization in charge of the WM center for the first time in its 58-year history last year, there was much criticism about WM services without a PB center. A commercial bank official said, "For Nonghyup, which has the weakest WM sector among commercial banks, establishing a PB center and recruiting PBs would have been a burden due to the high physical cost expenditure."

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