[Financial Retirement Polarization] "Let's leave while they take care of us"... Market Bankers Packing Up Increase 4.5 Times in One Year

Last Year, 2,515 Early Retirees from 5 Major Banks
Generous Benefits Lead 1970s-born Managers and Assistants to Apply for Early Retirement
Digital Transformation and Branch Consolidation as Causes

2515 vs. 0. This is the number of voluntary (hopeful) retirees from domestic commercial banks and policy banks last year. While commercial banks have been aggressively offering generous conditions to induce large-scale voluntary retirements every year, policy banks have not implemented voluntary retirement since the introduction of the wage peak system in public institutions in 2015. Bankers at commercial banks, influenced by the exceptional benefits and the mindset of 'let's leave while they take care of us,' have packed their bags up to those born in the 1970s. However, employees at policy banks have endured due to relatively low compensation, bearing the side effects of personnel stagnation.

According to a comprehensive survey by Asia Economy on the status of retirees from domestic banks, 2515 people applied for and retired through voluntary retirement from the five major banks?Shinhan, KB Kookmin, KEB Hana, Woori, and NH Nonghyup?from the end of last year to early this year. If Korea Citibank, which recently announced its withdrawal from retail banking, also conducts workforce restructuring, the number of retirees from commercial banks this year is likely to increase further. In contrast, during the same period, the three policy banks?KDB Industrial Bank, Korea Eximbank, and IBK Industrial Bank?had zero voluntary retirees. The number of employees subject to the wage peak system, designed to reduce wages annually after the age of 55, is expected to reach 1,393 this year, marking a record high. (Editor's note)

[Asia Economy Reporters Kiho Sung and Seungseop Song] As digital transformation rapidly progresses across the financial industry, banks are accelerating organizational and workforce restructuring. Despite regulatory authorities' calls for restraint, banks are drastically reducing offline branches while implementing the largest-scale voluntary retirements. The introduction of the wage peak system has accelerated the 'retirement clock,' and the opportunity to receive retirement bonuses worth hundreds of millions of won has fostered a widespread sentiment of 'let's leave while we can.' However, there are concerns that the rapid reduction of branches and bank employees may negatively impact financially vulnerable groups.

According to the Financial Supervisory Service on the 27th, the total number of employees at the five major banks?Shinhan, KB Kookmin, KEB Hana, Woori, and NH Nonghyup?was 76,165 at the end of last year, a decrease of 1,480 from 77,645 at the end of the previous year. This figure is 4.5 times higher than the 323-person decrease recorded in 2019.

The sharp increase in the reduction of bank employees is mainly due to branch consolidations. As online banking has become more active, banks have restructured their branch networks, naturally inducing a large number of voluntary retirements. According to the Financial Supervisory Service, the total number of domestic bank branches at the end of last year was 6,405, down 304 from 6,709 a year earlier. Only 30 new branches were opened, while 334 were closed. Commercial banks reduced 238 branches, and regional banks lost 44.

The number of voluntary retirees has surged due to the decrease in branches. From late November last year to early this year, 2,515 employees from the five major banks took voluntary retirement. This is about 750 more than the 1,763 who applied from late 2019 to early last year. The increase in voluntary retirees is partly due to the exceptional conditions offered. According to the Bankers Association, the total retirement pay paid by domestic banks last year reached 1.3338 trillion won, a record high.

"Let's leave while they give more"... Generous retirement conditions compared to other industries also played a role

In particular, commercial banks are offering more aggressive conditions than in previous years to induce voluntary retirement. Generous packages include up to three years' salary, tuition fees, and job transition support, and the eligibility is expanding to deputy managers and managers in their 40s. An employee at Bank A said, "Everyone knows that the number of required personnel is decreasing every year as non-face-to-face banking expands," adding, "There is a growing perception that waiting longer might mean losing these good retirement conditions, which could actually be a disadvantage."

In fact, last year, the highest earners in the banking sector were not bank presidents but voluntary retirees who completed their full tenure. The top five earners at Hana Bank were all voluntary retirees, each receiving compensation in the 1.2 billion won range. This amount exceeds the 1.022 billion won received by former Hana Bank President Seongkyu Ji. Among the retirees, four received retirement bonuses exceeding 1 billion won.

However, there are concerns that the downsizing of banks could ultimately harm consumers. Critics warn that banks' profit-maximizing strategies may inconvenience financially vulnerable groups such as the elderly and disabled. Taejun Park, director of the Credit Finance Research Institute, said, "Bank branch closures tend to start in rural areas where branch maintenance costs are high," expressing concern that "services for financially vulnerable groups, including the elderly, may weaken."

Jo Yeonhaeng, chairman of the Financial Consumer Federation, advised, "While organizational slimming is necessary, if unprofitable businesses are also reduced, ordinary citizens may be neglected," urging that "decisions should be made considering social benefits as well."

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