In the High Salary Rally in the Financial Sector... K-Bank Also Considering Wage Increase

Turned Profitable Last Year but Average Salary Remains Unchanged
Wage Levels Lag Behind in Some Savings Banks
Conscious of KakaoBank and Commercial Banks' 100 Million Won Rally

[Asia Economy Reporter Minwoo Lee] Internet-only bank K-Bank is considering a wage increase. This is to boost employee morale and prevent talent drain amid a trend where major banks, some savings banks, and competitor KakaoBank are all raising wages. Since early last year, the IT industry-led wage increase rally has extended to the financial sector, especially fintech (finance + technology) companies and internet-only banks.

According to the financial industry on the 28th, K-Bank is also reviewing plans to raise employee wages. Following the grant of 3 million stock options to all employees in July last year, the bank plans to offer another "carrot." It appears they have concluded that securing talent with stock options alone, which could lead to mass resignations after listing, is difficult.

The compensation level is expected to be substantial. Since competitors have successively raised wages, measures are needed to reduce the relative deprivation felt by internal employees and prevent talent outflow. According to K-Bank's recently disclosed annual report on governance and compensation systems, the average employee compensation last year was 80 million KRW, unchanged from the previous year. Compared to KakaoBank's average compensation of 153 million KRW last year, it is just over half. KakaoBank has decided to raise all employees' wages by at least 10 million KRW this year, pay 30% of the salary in stock options, and set bonuses at 20% of the annual salary, which could widen the gap further.

The difference with traditional banks is also significant. According to the '2021 Business Report' of the four major commercial banks (KB Kookmin, Shinhan, Hana, Woori) last year, the average employee salary at these four banks was 105.5 million KRW, marking the first time the '100 million KRW' era was reached. This is attributed to the record-high net profits of the four major commercial banks. Pepper Savings Bank (88 million KRW) and SBI Savings Bank (85 million KRW), which are among the top in average compensation among savings banks, also surpass K-Bank. Since K-Bank turned a profit for the first time last year since its launch in 2017, voices demanding wage increases internally are growing. A senior K-Bank official recently told Asia Economy, "A wage increase is inevitable to prevent talent outflow," adding, "Although it is difficult to match KakaoBank's scale of increase, we are considering compensation plans that will boost employee morale."

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