Last Year, 4,000 Bank Employees Took Early Retirement with Severance Pay of 300 Million to 600 Million KRW

18 Domestic Banks Announce 'Management Status Reports'
Bank Branches Decreased by 292 Last Year
Top 5 Banks' Average Annual Salary Exceeds 100 Million KRW

President Yoon Strongly Criticizes Banks for 'Bullying and Servitude'
New Financial Support Measures for Small Businesses Expected

Last year, the total number of voluntary retirees from 18 domestic banks, including commercial banks, regional banks, and foreign banks, was recorded at 4,312. The severance pay given to these retirees ranged from a minimum of 300 million KRW to a maximum of 600 million KRW. As banks achieved maximum profits during the interest rate hike period, the severance pay also increased.

According to the 'Bank Management Status Report' released by the Korea Federation of Banks on the 1st, among the five major banks last year, Hana Bank paid the highest severance pay per employee at 407.94 million KRW. It was followed by KB Kookmin Bank (376 million KRW), Woori Bank (372.36 million KRW), NH Nonghyup Bank (327.12 million KRW), and Shinhan Bank (293.96 million KRW). The average severance pay per employee among the five major banks was 355.47 million KRW. Compared to the 2021 average severance pay per employee (317.82 million KRW), this is an increase of 37.65 million KRW.

Severance Pay at Regional Banks Also Reaches 400 Million KRW

The highest severance pay was given by Citibank at 604.35 million KRW. This was due to a large-scale workforce reduction following the withdrawal from retail banking. It is also notable that the severance pay at regional banks was larger than that of the five major banks. Gwangju Bank (400.41 million KRW), Kyongnam Bank (394.46 million KRW), Busan Bank (384.9 million KRW), and Jeju Bank (371.86 million KRW) all reached around 400 million KRW.

Last year, the number of voluntary retirees at the five major banks exceeded 2,000. Kookmin Bank had the most with 674 employees, followed by Hana Bank (521), Nonghyup Bank (493), Woori Bank (415), and Shinhan Bank (254). Regional banks combined had 161 retirees, foreign banks including Citibank and SC First Bank had 1,727, and special banks had 67 voluntary retirees.

Voluntary retirement is a phenomenon occurring as bank branches close due to the digital transformation of banking operations. Last year, the number of domestic branches of the 18 banks was 5,729, a decrease of 292 from 6,021 in 2011. The five major banks reduced their branches from 4,187 to 3,989 during the same period. The reductions were in the order of Shinhan (63 branches), Kookmin (58 branches), Woori (55 branches), Hana (19 branches), and Nonghyup (3 branches).

A representative from a commercial bank said, "The ideal workforce structure is pyramid-shaped, but currently, banks have many senior employees, so voluntary retirement is being implemented to restructure the workforce." He explained, "Decades ago, when branch-centered operations were the norm, many new employees were hired, but now banks consider it advantageous to let go of senior employees and thus accept voluntary retirement."

Next Step: Banks Preparing Support Measures for Small Business Owners?

[Image source=Yonhap News]

The annual salary per employee at the five major banks also exceeded 100 million KRW. Hana Bank paid the highest at 114.85 million KRW, followed by Kookmin Bank (113.69 million KRW), Shinhan Bank (110.78 million KRW), Nonghyup Bank (106.22 million KRW), and Woori Bank (104.76 million KRW).

However, the fact that severance pay reaching hundreds of millions of KRW and salaries in the hundred-million KRW range are based on the banks’ record-high profits, which stem from increased loan interest rates, is a point of controversy. President Yoon Suk-yeol has repeatedly issued strong criticisms targeting banks against this backdrop. "Small business owners struggling with high interest rates sighed deeply, saying they feel like 'servants to the banks.'" (October 30) "Korea’s banks are a kind of monopoly, so they often engage in power abuse." (November 1)

Following the release of this report, the banking sector is on edge. Right after the president’s remarks, details of the banks’ hundred-million KRW salaries and severance pay were disclosed, which could worsen public opinion. A commercial bank official said, "Isn’t the next step for the authorities to pressure banks to lower loan interest rates for small business owners or to prepare support measures such as contribution funds for small business owners?" Even after President Yoon’s criticism of the 'bank money party' earlier this year, banks announced social contribution plans to support vulnerable groups with '10 trillion KRW + α' over the next three years.

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