On October 1, a passerby enters an ATM booth operated by a major commercial bank in Seoul. Yonhap News
Written by Lee Hwan-woo
South Korean commercial banks have disbursed more than 6.5 trillion won (approximately $4.83 billion) to employees who voluntarily resigned since 2019, data showed on Wednesday, as the banking industry aims to cut costs in the digital age. It became clear.
The findings have fueled public dissatisfaction with lenders who are seen as reaping “windfall profits” from high borrowing rates.
According to data compiled by the Financial Supervisory Service and announced by Representative Jung Joon-ho of the main opposition Democratic Party, 14 commercial banks spent 6.54 trillion won on voluntary retirement programs from 2019 to August of this year. It became.
During this period, a total of 16,236 employees left the 14 companies despite not reaching retirement age.
In return, each eligible person received an average of 402.94 million won in early retirement compensation, which the financier determined was a more efficient way to reduce expenses than holding on to the retirement benefits until retirement.
Such cost-cutting strategies are increasingly being adopted by the banking industry as banks close branches to accommodate accelerated digitalisation.
“However, the amount spent on early retirement benefits can be discouraging to many members of the public,” Chong said.
He mentioned self-employed people and small business owners who have been hit hard by the coronavirus pandemic and have taken loans from banks to keep their businesses afloat.
High interest rates and high costs of living weigh on these borrowers.
On the other hand, banks earn huge profits from high interest income.
By company, Citibank Korea ranked first in providing early retirement benefits.
While Kookmin Bank paid 1.27 trillion won to 2,130 employees, Kookmin Bank paid 1.24 trillion won to 3,323 employees, and Shinhan Bank paid 672.7 billion won to 1,954 early retirees.
Hana Bank paid 851.8 billion won to 2,454 employees, and Woori Bank paid 807.8 billion won to 1,940 employees.
