Reducing Size and Increasing Salaries at Four Major City Banks... Average Annual Salary Approaching 100 Million KRW

[Asia Economy Reporter Song Seung-seop] Amid the acceleration of downsizing in commercial banks due to the spread of non-face-to-face and digital finance, the average salary level has rapidly increased.

According to the business reports of four banks?KB Kookmin, Shinhan, Woori, and Hana?on the 21st, the average salary per employee last year was 98 million KRW, about 2 million KRW higher than the previous year.

By bank, Kookmin Bank had the highest average salary at 104 million KRW, followed by Hana Bank (97 million KRW), Shinhan Bank (96 million KRW), and Woori Bank (95 million KRW).

Contrary to the average salary, the number of employees at the end of last year was 57,896, a decrease of 2,561 (4.2%) compared to 60,457 in 2017. The number of regular and indefinite contract employees, excluding fixed-term workers, was 57,540, down 2,797 (4.9%) during the same period, showing a larger decline. The number of fixed-term workers increased by 1,082 from 2,917 to 3,999.

The largest reduction in staff was at Hana Bank, which cut 1,293 employees. Kookmin Bank followed with a reduction of 625 employees, then Woori Bank (475), and Shinhan Bank (168).

As the workforce shrank and salary levels rose, retirees receiving severance pay reaching 1 billion KRW appeared. Last year, commercial banks increased voluntary retirement compensation by offering three years’ worth of wages, tuition fees, and job transition support funds.

Hana Bank’s top five highest-paid employees last year were all managerial-level retirees who received salaries in the 1.2 billion KRW range. This was higher than Hana Bank President Ji Seong-gyu’s salary of 1.022 billion KRW. Among them, four received more than 1 billion KRW solely as severance pay.

At Woori Bank, honorary retirees at the deputy general manager level occupied the ‘top 5’ highest salaries. They received up to 870 million KRW in salary last year, about 200 to 300 million KRW more than Woori Bank President Kwon Kwang-seok’s 553 million KRW. Two of the five received severance pay exceeding 800 million KRW, and three received severance pay in the 700 million KRW range.

At Kookmin Bank and Shinhan Bank, four of the ‘top 5’ highest-paid employees, excluding President Heo In and President Jin Ok-dong, were all retirees. Their severance pay ranged from 700 million to just over 800 million KRW.

Meanwhile, branch offices are also rapidly decreasing. This is the result of consolidation and downsizing of branches. Hana Bank reduced 102 branches, the largest decrease, followed by Kookmin Bank and Woori Bank, which reduced 85 and 56 branches respectively. Shinhan Bank reduced 17 branches.

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