Banks Begin Year-End Personnel and Organizational Restructuring... Will the Largest Voluntary Retirement in History Occur?

NongHyup Bank Completed Last Week's Executive Personnel Changes Including Vice Presidents, Headquarters Chiefs, and Department Heads
Shinhan Bank and Three Other Major Banks to Start Soon
Over 70% of Executives at Four Major Banks to End Terms This Month

[Asia Economy Reporter Park Sun-mi] Starting with NongHyup Bank, the banking sector has officially begun personnel appointments and organizational restructuring. A total of 64 executives from the four major commercial banks have terms expiring this year, and the scale of personnel changes is expected to vary depending on whether the focus is on stability or change. Additionally, with the acceleration of non-face-to-face services due to the impact of COVID-19 and increased competition with big tech companies, the importance of digital capabilities has grown, leading to expectations that organizational restructuring will focus on this area.

According to the banking sector on the 15th, after NongHyup Bank conducted personnel changes last week including vice presidents, headquarters chiefs, and department heads, the four major commercial banks will enter the personnel and organizational restructuring season by the end of the year. Shinhan Bank’s parent company, Shinhan Financial Group, will hold a Subsidiary Management Committee meeting on the 17th to decide the future of Shinhan Bank President Jin Ok-dong, whose term expires at the end of this month. Following that, from next week until 30 days prior, personnel changes for vice presidents and headquarters chiefs will be conducted sequentially.

At Shinhan Bank, among the 20 vice presidents, 14 will have their terms expire at the end of this month, along with one standing auditor and two managing directors. Personnel changes for general staff below department heads are also expected to be completed by January next year.

Woori Bank will begin personnel and organizational restructuring as early as this weekend or by early next week at the latest. Among Woori Bank’s 23 executives, the terms of three vice presidents, ten deputy vice presidents, and one managing director?a total of 14 executives?expire at the end of this month. Organizational restructuring will accompany personnel changes with a focus on strengthening digital capabilities. Hana Bank, which traditionally conducts personnel changes around the Christmas holidays, will start personnel appointments around the 24th of this month. Sixteen executives, including five vice presidents and eleven executive directors, face term expirations at the end of this month. KB Kookmin Bank, which also conducts year-end personnel changes, will begin personnel appointments and organizational restructuring around the 27th of this month. Under KB Kookmin Bank President Hur In, all six vice presidents have terms expiring at the end of this month.

Over 70% of Executives at the Four Major Banks Have Terms Expiring This Month
Where to Place the Weight: Stability or Change?
Growing Need for Organizational Restructuring Aligned with the Digital Environment

With over 70% of executives at the four major banks having terms ending this month, the management’s calculations have become complex between organizational stability through reappointment and new attempts involving replacement. Even amid the spread of COVID-19, NongHyup Bank boldly replaced six of its twelve internally promoted vice presidents in this personnel reshuffle and carried out organizational restructuring emphasizing the digital sector. Other banks are also likely to proceed with generational changes aligned with the evolving digital environment.

A banking sector official preparing for personnel changes said, "If there is a large-scale executive reshuffle this time, the degree of organizational restructuring will also be significant, so major changes could occur. The environment banks face next year, including big tech offensives, is challenging, making executive personnel changes and organizational restructuring more important."

Along with the year-end personnel and organizational season, the banking sector is also conducting large-scale voluntary retirements. NongHyup Bank, offering up to 39 months’ salary as severance pay, received 503 voluntary retirement applications, a 41% increase from last year. The other four major commercial banks are in the final stages of labor-management negotiations for voluntary retirement, with agreements expected to be reached by next week at the latest.

Coinciding with the banking sector’s personnel season, Kim Woo-jin, Senior Researcher at the Korea Institute of Finance, released a report titled "Improvement Measures for Human Resource Management Systems in Domestic Banks," pointing out that "while banks’ core competencies lie in intangible assets such as human capabilities rather than hardware aspects like capital and asset size, domestic banks exhibit a ‘jar-shaped’ workforce structure with a low ratio of clerks to managers and suffer from a shortage of specialized personnel."

He advised, "A jar-shaped workforce structure with many managers leads to decreased vitality and increased costs for banks. It is necessary to continuously pursue reforms of related systems that can support performance management-oriented business activities."

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